Figures and tables in Partition of the Life Course: An Extended Dynamic Microsimulation Analysis

Abstract

This study explores life courses in a dynamic microsimulation framework at a time of high public interest in prolonging working lives. We provide new insights into how historical records could be merged with microsimulation outcomes and develop a new indicator for measuring and illustrating individual life course stages in adulthood. Partition of the life course yields the average lengths of life course stages in Finland. We illustrate our indicator and its distribution by gender, cohort and level of education. The proposed indicator is also used to elaborate widely accepted indicators from the Pension Adequacy Report. We conclude that the proposed partitioning method should be easily transferrable to other countries where historical records are available.

This article contains 7 figures and 5 tables.

Figures

**Figure 1.** Partition of the life course for cohorts born in 1945–1990, years

**Figure 2.** Partition of the life course for simulated retirees in 2008–2058, years

**Figure 3.** 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.

**Figure 4.** 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.

**Figure 5.** Average duration of retirement (including early retirement) by cohort and gender (M=men, W=women), years

**Figure 6.** 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

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

Year of retirement	Count
2008	62,918
2018	65,249
2028	63,078
2038	51,821
2048	49,471
2058	35,622

State	Description
	Primarily employed (“active”)
15	Primarily employed for the first consecutive year
16	Primarily employed for the second consecutive year
1	Primarily employed for at least the third consecutive year
	Sickness allowance preceding full disability pension
4	Sickness allowance preceding full disability pension
	Unemployed
3	On the unemployment pathway to retirement
2	Unemployed (excluding those on the unemployment pathway to retirement)
	Retired
8	Old-age pension
11	Partial old-age pension and employed
7	Partial old-age pension and not employed
17	Full disability pension for the first consecutive year
9	Full disability pension for at least the second consecutive year
10	Partial disability pension and employed
18	Partial disability pension and not employed
5	Part-time pension
6	Years-of-service pension
21	National old-age pension only
22	National disability pension only
	Outside the labor force for other reasons
19	Permanently outside the labor force but has accrued earnings-related pension
13	Outside the labor force but has accrued earnings-related pension
20	Outside the labor force and has not accrued earnings-related pension
	Deceased
12	Deceased