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Increasing statutory retirement age, labor market outcomes, and effect heterogeneity: the 2017 pension reform in Finland

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  • Nivalainen, Satu
  • Ilmakunnas, Ilari

Abstract

We study the 2017 pension reform in Finland, raising the statutory retirement age of the studied cohorts from 63 to 63 years and 6 months. Using monthly-based register data and a differences-in-differences approach, we estimate the reform’s impact on retirement, employment, unemployment, disability, sickness, and inactivity. Results indicate a significant 19-percentage-point increase in employment between the old and new retirement ages, alongside notable rises in unemployment, inactivity, and disability. Largely – but not entirely – this stems from the persistence of the previous labor market state. Gender differences are not large, but the effects vary considerably across education, income, employment sector, and self-employment status.

Suggested Citation

  • Nivalainen, Satu & Ilmakunnas, Ilari, 2025. "Increasing statutory retirement age, labor market outcomes, and effect heterogeneity: the 2017 pension reform in Finland," Journal of Pension Economics and Finance, Cambridge University Press, vol. 24(4), pages 564-589, October.
    • Handle: RePEc:cup:jpenef:v:24:y:2025:i:4:p:564-589_4
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