Finland's youthful oldies

UNESCO Courier, Jan, 1999 by Ethirajan Anbarasan

Finland's baby-boomers are taking early retirement and there aren't enough youngsters to replace them

With a rapidly aging population and a huge proportion of its elderly people opting for early retirement, Finland is facing the prospect of unprecedented labour shortage. The rate of greying in Finland is faster than in other European Union countries and the number of young workers replacing the retiring elders is not proportionate.

The average age of the Finnish population is on the rise owing partly to changes in the age groups and partly to the increased life expectancy rate. Today the elderly constitute 15 per cent of the total population of around five million. This reflects the fact that Finland witnessed a higher birth rate than any other country during the West's post-World War II baby boom.

Though the statutory retirement age is 65 years, 80 per cent of the population retire before they reach 60 years of age. Carin Lindqvist-Virtanen, a senior researcher at the Ministry of Social Affairs, Helsinki, says that if the present trend to take early retirement continues "then it will cause serious problems for the labour market in the future as not many young people will be there to replace the retiring workers. The massive exodus [into retirement] could also weaken the financial position of the pension scheme."

Among Finnish men, participation in the labour market for the 55-59 group is among the lowest of the Organization of Economic Co-operation and Development (OECD) countries. One main reason for this development, analysts say, has been the government's encouragement of early retirement during the economic recession of the early 1990s. This included favourable options like handsome pension and unemployment benefits allowing people to retire comfortably at the age of 55.

Age discrimination has been cited by social scientists as another factor leading employees to take early retirement. According to a report by Finland's National Committee on Aging policy, elderly people are subject to discrimination and receive degrading treatment. "The elderly are still frequently treated as economically non-productive people, a care burden or encumbrance and a medical problem," it says.

The government has also been discussing the possibility of raising the retirement age to 67 years to tackle the labour shortage problem. However, critics argue that there is little point in doing that until more people can be encouraged to work up to the statutory retirement age of 65 years.

The Finnish government last year launched a five-year programme to stop age discrimination in the workplace. Annikki Korhonen, senior Adviser at the National Research and Development Centre for Welfare and Health, says that this National Programme for Aging Workers (NPAW) seeks to initiate a change in attitude which will help improve the position of aging workers and reduce the exodus of labour.