Ageing and Employment Policies: Finland (Ageing and by Organisation for Economic Co-Operation and Development

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Extra resources for Ageing and Employment Policies: Finland (Ageing and Employment Policies)

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Average number of days sick in Finland by age and gender, 2001 Women Men 24 22 20 18 16 14 12 10 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 a) The average number of days shown are only for people who were sick. 1. Source: Finnish Labour Force Survey. However, the disability rate amongst older workers is high Receipt of an ordinary disability pension in Finland usually follows one year of sick leave. Disability pension is payable to people between 16 and 65 who are unable to support themselves by regular work, taking age, occupation, education and place of residence into consideration.

Furthermore, there are large differences in retirement rates. 2% in the OECD area. One possible explanation for this difference lies in the incidence of disability in Finland which at 16% for the age group 50-64 is nearly double the OECD average of 9%. 7% of older women in Finland are inactive because of family responsibilities compared to the OECD average of around 18%. Of course, there are several possible explanations for these differences in activity between Finnish older workers and their OECD average counterparts.

Since 1996, the national pension has been earnings-tested with regard to earnings-related pension benefits, and therefore is of minor importance for most people. The earnings-related pension consists of all the pension rights an individual has accrued from each employment contract including self-employment. Benefits are based on the number of years in employment, the accrual rate and “pensionable income”, which is based on the gross income net of employee’s pension contributions. At the end of the career, the pension rights earned from each employment contract are indexed (wages 50% and price inflation 50%) to the current date and summed up.

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