1. Pensions and retirement
  2. Demography
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Partition of the Life Course: An Extended Dynamic Microsimulation Analysis

  1. Janne Salonen  Is a corresponding author
  2. Heikki Tikanmäki
  3. Sampo Lappo
  1. Keva, Finland
  2. Finnish Centre for Pensions, Finland
Research article
Cite this article as: J. Salonen, H. Tikanmäki, S. Lappo; 2021; Partition of the Life Course: An Extended Dynamic Microsimulation Analysis; International Journal of Microsimulation; 14(3); 54-75. doi: 10.34196/ijm.00241
6 figures and 3 tables

Figures

Partition of the life course for cohorts born in 1945–1990, years
Partition of the life course for simulated retirees in 2008–2058, years
Distribution of the length of working life for retirees in 2018 by level of education and gender (M=men, W=women), years.In box and whisker plot, the box represents 50 per cent of the distribution and whisker ends 95 per cent. Line in the box is median and x is the mean.
Distribution of the length of (total) retirement for retirees in 2018 by level of education and gender (M=men, W=women), years. In box and whisker plot, the box represents 50 per cent of the distribution and whisker ends 95 per cent. Line in the box is median and x is the mean.
Average duration of retirement (including early retirement) by cohort and gender (M=men, W=women), years
Average duration of retirement (old-age pension) and duration of working life by cohort and gender (M=men, W=women), years

Tables

Table 1
Aggregation rules for life course stages in 1963–2090
Life course stage Rules 1963–1979 Rules 1980–2008 Contents 1963–2008 Rules 2009–2090 Contents 2009–2090
Employed Workdays > 0 Workdays > 0 Workdays based on pensionable employment contracts 1,15,16 Employed
Social security spells Pension credited benefit days > 0 Pension credited benefit days > 0orNo workdays and not drawing a pension Increment for credited periods, including long-term unemployment, sickness and parental benefits 2,3,4,13,19,20 Long-term unemployed, on sickness benefit and permanently inactive
Employed and retired NA Drawing a pension > 0 and workdays > 0 Workdays and on part-time pension or on disability pension 5,10,11 Employed and on partial disability pension or on partial old-age pension
Retired NA Drawing pension > 0 Old-age pension, disability pensions, early old-age pension, unemployment pension and farmers’ special pension 6,7,8,9,17,18,21,22 Old-age pension, disability pensions, partial old-age pension and years-of-service pension
Old-age retired NA Drawing a pension > 0 Old-age pension 8,21 Old-age pension
Early retired NA Drawing a pension > 0 Retired excl. old-age pension 6,7,9,17,18,22 Retired excl. old-age pension
<18 yrs. Adolescence (in compulsory education)
NA Not classified above
  1. Notes: Drawing a pension in one’s own right at 31 Dec. Workdays and employment cover both private and public sector employed and self-employed. Rules for 2009–2090 are based on ELSI model states, see Salonen (2020).

Table 2
Summary of indicators
Duration of working life
Expectation based approach
Based on a sample from microdata (LFS)
Focus on labour force participation (employed or unemployed)
Regularly updated
The expected duration of working life for retirees in 2019 is 39 years
Duration of retirement
Expectation based approach
Based on a sample from microdata (LFS)
Fixed years available, retirees in 2018
The expected duration for retirees in 2018 is 22 years
Partition of the life course
Extended microsimulation approach
Distributional measures of individual variation
Based on total population including sub-populations
Coherent individual life course stages
Focus on pension accrual
Early retirement and old-age retirement
The average duration of retirement for the retirees in 2018 is 23 (old-age retired) or 24.6 (inc. early retirement) years
The average duration of the duration of working life for the retirees in 2018 is 30.9 years
Table 3
Distribution of the ratio (length of (total) retirement/length of working life) for retirees in 2008–2058
Year P10% P25% P50% Mean P75% P90%
2008 0.40 0.64 0.93 1.38 1.35 2.33
2018 0.31 0.55 0.78 1.08 1.06 1.65
2028 0.31 0.51 0.70 0.88 0.91 1.33
2038 0.33 0.51 0.67 0.80 0.86 1.19
2048 0.34 0.49 0.63 0.69 0.78 1.00
2058 0.35 0.49 0.61 0.65 0.76 0.91

Data and code availability

The data used in the study is from ELSI-microsimulation model. The policy regarding ELSI is; Proprietary, with executable not available. No specific software code has been developed for this study.

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