Higher education best guarantee of long working career in Finland

The economic recession Finland experienced in the early 1990s forced many employees aged 50 to 64 to end their careers early. People with a third-level education were more likely than others to remain employed until retirement age. However, since the recession, employment has recovered better among employees aged 50 to 64 than among younger workers.

In the early 1990s, Finland’s economy underwent a deep recession, which had a profound impact on the rates of employment among different age groups. A new report by Statistics Finland, Early exit from working life among ageing employees, examines the working careers of over 66,000 older employees in Finland during this decade.

The study found that employment has recovered better among older workers than among persons in younger age brackets. The rate of employment among the population aged 55 to 59 was even higher in 2002 than it was before the recession. This does not necessarily mean that ageing people are being re-employed - rather that there is now a reduced risk of unemployment.

Among younger women and men (in the 25 to 49 age group), the employment rate is at present still five to 10% below what it was before the recession.

Importance of third level education

A good education and an occupation involving no specific risks to working capacity improve the chances of remaining employed right up to retirement age. Such occupations include technical planning and management, teaching, legal and administrative work.

A third-level qualification can provide the best protection against unemployment in the final years of working. During the recession, 6% of employees aged 50 to 64 with a third-level degree had their career terminated as a result of unemployment, whereas the corresponding figure among those with only an upper secondary school qualification was 15%.

In the economic upswing that followed, this disparity by education level diminished as the benefits of a more buoyant economy raised employment prospects for all workers.

Increasing insecurity

During the 1990s, the likelihood of staying employed was strongly linked to the prevailing economic situation. However, internal developments affecting sectors generate uncertainty about employment prospects even during an economic upswing. In sectors undergoing a high level of restructuring or rationalisation, the risk of an early exit during the final years of one’s working career increases considerably.

In Finland, employees in the public sector are more likely than those in the private sector to continue working until retirement age, irrespective of economic fluctuations.

Lower paid employees most at risk

During the recession, employees with lower salaries in supervisory positions in the private sector were more vulnerable to staff cuts than those in higher salary groups. In that period, 29% of low-level supervisors aged 50 to 64 in the private sector had their careers ended through unemployment. Even during the economic upsurge that followed, this figure remained at 14%.

Blue-collar workers in manufacturing faced even greater risk (37%) of having their working careers brought to an early end by unemployment.

These figures contrast with the 18% of upper-level salaried employees aged 50 to 64 in the private sector whose careers ended in unemployment during the recession.

‘Age, work and gender’

This new report from Statistics Finland examines participation in and exit from working life among employees aged between 50 and 64 in Finland during the recession and subsequent economic recovery of the 1990s. The findings of the study are based on data derived from Statistics Finland’s register files. The study, which is part of the project Age, work and gender - management of ageing in later working life, was conducted by researcher Noora Järnefelt from Statistics Finland in collaboration with the University of Jyväskylä.