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Unemployment, disability and poor health weaken the transition to the labour market for many young people. Their earnings from work are low which often leads also to weaker pensions. This is revealed in a fresh doctoral dissertation.

In his doctoral dissertation, Janne Salonen (M.Soc.Sc.) assesses the use of new statistical approaches to pension studies. In his research, Salonen observed that nearly 12 per cent of the males born in Finland in 1987 face persistent difficulties in labour market attachment.  

“The analysis revealed that the labour attachment of some of the men born in 1987 is considerably weaker than that of others of the same age cohort. In one of the groups of young men, as many as eight out of ten were unemployed at age 18. In the other group, the majority were outside the labour markets due to poor health or disability,” Salonen says. 

Labour attachment among the young changes over time. However, being outside the labour market for a long time usually narrows the options for the young. In addition, their earnings are weak. In time, this will show in the pensions of the young cohorts. 

“The larger the scars caused by the labour markets, the smaller the pension of the young. Fortunately, the majority of this cohort has found its place on the labour market,” Salonen summarises. 

Research based on register data of 30,000 men 

Salonen’s research data consists of register data of 30,000 men born in Finland in 1987. The data includes information on their earnings, education, health and family status. The data, from the registers of the Finnish Centre for Pensions, describe the life situation of the young men in 2005 and 2013. 

The trajectory analysis Salonen has applied is a statistical technique. It is well suited for longitudinal analysis and has been applied in different disciplines. The key purpose of trajectory analysis is to reveal latent subgroups among the distribution under study. 

 “Trajectory analysis can be a useful tool when assessing pension policy since it can be used to describe population subgroups in a simple manner and to test simulation models,” Salonen explains. 

In addition to the life courses of young men, Salonen examines the use of trajectory analysis in the study of pension insurance for the self-employed and in the microsimulation model of the Finnish Centre for Pensions.

Doctoral defense at the University of Tampere on 28 August 

Janne Salonen (M.Soc.Sc.) defends his dissertation New methods in pension evaluation: Applications of trajectory analysis and dynamic microsimulation at the Tampere University on Friday 28 August 2020 at 12 noon (Paavo Koli auditorium).  The opponent is Professor Niku Määttänen (University of Helsinki). The language of the defense is Finnish. 

Salonen works at the Research Department of the Finnish Centre for Pensions. His research subjects relate to the young, the self-employed and statistical methods.  

This is staging