Finland’s National Programme for Ageing Workers

Calouste Gulbenkian Foundation (UK Branch) This case study is part of a series of international policies that focus on easing the transition to retirement and later life. The case studies and the accompanying report were produced for the Calouste Gulbenkian Foundation (UK Branch).

The early 1990s saw Finland facing the worst economic crisis in its history. The economic downturn coupled with what was commonly known in Finnish society as the “age problem” – a significant ageing population and shortage of labour – required concerted action. Government policies of the 80s had encouraged an early exit from the workforce to make space for younger workers: the legal retirement age was 65, but Finns were given the option of early retirement from 58 onwards. With the labour force reaching its lowest point in 1996, a new strategy was needed.

The Committee for Ageing Workers proposed the Finnish National Programme on Ageing Workers (FINPAW) in 1996. The programme was developed in 1997, launched in 1998, and concluded in 2002. Its primary aims were to encourage ageing workers – 45  to 64 years old – to remain in the workforce longer, as well as provide training and skills to help ageing workers stay up-to-date with changing technologies and workplace demands.

The challenge

In the 1980s and 1990s, “the economic recessions, rapid industrial restructuring and promotion of competitiveness accompanied by new qualifications for the labour force reduced the demand for ageing workers” in Finland.[6] From 1989 onwards, the average retirement age had remained largely unchanged at 58.2 years, almost 7 years less than the legal requirement of 65. Ageing workers were a growing demographic, and Finland was “expected to have the most rapidly increasing ageing EU population until 2020”, underlining the need for a long-term solution to address the problem.[2] Early retirement was culturally ingrained, having been advocated by government since the 1960s.

The challenge facing ageing workers was twofold: they were more likely to have “educational deficiencies” with “only compulsory education, and … problems involving functional reading skills and computer literacy”, but they were also most in need of further training and skills in order to stay up-to-date with the needs of the workplace and the economy.[6] Therefore, these factors made ageing workers more vulnerable to losing their jobs than their younger counterparts, and with workplace training and selective employment measures aimed at younger workers, their vulnerability was all the more marked.

The initiative

The Finnish National Programme on Ageing Workers (FINPAW) was launched in 1998. Its objectives were “to promote the employment of those over the age of 45 and to reduce exclusion and premature retirement through a) the promotion of practical learning [and] b) the development of the links between health, education and working life”.[17] The programme’s Executive Summary outlined six specific goals:

“1. Raising the employment rate of ageing workers

“2. Raising the average pension age

“3. Raising the share of the ageing in the measures of the labour administration

“4. Spreading MWA activities [Maintenance of Work Ability (TYKY-Barometri in Finnish)] and enhancing the ‘work ability’ of ageing workers

“5. Raising the use of part-time pensions and other flexible working time models

“6. Diminishing age discrimination and changing attitudes to be more favourable towards the ageing.”[17]

The programme was developed and overseen by three government ministries: the Ministry for Social Affairs and Health, the Ministry for Labour, and the Ministry for Education. The five-year programme came to a conclusion in March 2002.

The public impact

The impact of FINPAW can be considered from two distinct perspectives: firstly, its measurable achievements, for example the rise in the average retirement age; and secondly, the less easily measured outcomes such as changes in attitudes towards ageing. Whilst FINPAW was successful in achieving some of its objectives, it is hard to determine whether these positive outcomes were due to the programme itself. An external evaluation of the project in 2002 found that “using a narrow framework, within the paradigm and the goals set in the programme, the results look favourable, with the reservations to what extent this success can be attributed to the programme itself.”[4]

The programme did achieve some of its stated core objectives over its five-year period, and the following factors all increased:

  • The average retirement age
  • Participation levels of ageing workers within the workforce
  • The number of the part-time pension recipients
  • Awareness among ageing workers, professionals and the public about the programme.

There were mixed results relating to MWA activities, as this area had in any case been expanding since 1993, and FINPAW may have been “speeding up processes which were already in progress”.[13]

In 1996, the Finnish labour force fell to its lowest level, with 2,457,491 workers. The average age for retirement was 58.2 years, a figure that had remained largely unchanged since 1989. When FINPAW was launched in 1998, the average retirement age had increased slightly to 58.8 years, and over the course of the programme this figure continued to rise: to 59.0 years in 1999, 59.1 in 2000, and 59.3 in 2001, marking an overall 0.85 percent increase over four years.

As the average retirement age rose, so too did the size of the labour force – from 2,522,402 in 1998 to 2,623,421 in 2002, returning to pre-crisis levels.[8] The Ministry of Labour noted that during FINPAW the number of employed people rose by 200,000, over half of whom were ageing workers. Participation among the 55-59 age group rose from 51 percent to 63 percent between 1998 and 2001, and for those aged 60 to 64 participation rose from 20 percent to 25 percent.[4] Such growth “can be estimated to have been the consequence of a fall in unemployment among the ageing and deferred exits from the labour market. If the employment rate for the ageing had remained on the 1997 level for each birth cohort, employment would only have grown by 42,000 people as a direct consequence of the ageing of the population.”[11]

 In line with FINPAW’s objectives, the popularity of part-time pensions also increased. In 2001, the number of people working part-time was 13 percent, up from 7 percent in 1990, with ageing workers most likely to do take up such work. Of those aged 25 to 54, only 8 percent worked part-time, but 16 percent of those aged 55 to 59 did so, and 31 percent of those aged 60 to 64. This increase in part-time work is, in part, attributable to changes in legislation regarding part-time pensions: the age limit for a part-time pension had been lowered to 56 in 1998.[6] In 1997, almost 52 percent of 55 to 64 year olds “were receiving an individual early retirement pension. In 2002, this figure had fallen to 41.1 percent, excluding recipients of part-time pensions who were still working part-time, too.”[11]

Awareness of the programme was successfully promoted, with half of FINPAW’s annual budget of FIM25 million (EUR4.2 million) being dedicated to information and communications. A survey conducted by IRO Research Oy in 2001 found that around half of urban residents had heard of FINPAW and most of those aged over 50 knew of it, with one in five of them having found out more about it. The survey also found that the senior group was more likely than other age groups to have a positive attitude towards the programme.[16]

Ageist attitudes may have decreased slightly during the programme, but it is difficult to assess to what exent and whether this was due to FINPAW. The Social Development Co. Ltd surveyed a group of experts in 2001, 59 percent of whom “felt that the general attitude to ageing workers had changed for the better”.[4] That said, hiring new employees from the ageing group did not change significantly: “long-term unemployed [were] in the ‘hard core’ of unemployment, i.e. very difficult to find work for and now receiving labour market support”.[11] It seems that FINPAW did contribute to ageing workers remaining in the workplace, rather than recruiting the ageing unemployed to fill vacancies. In the Social Development Co Ltd.’s 2001 survey of experts, 37 percent responded that they sensed a change for the worse in the ageing unemployed people’s chances of finding a new job, whereas 44 percent noted some change for the better in ageing people’s ability to stay at work. Moreover, two in five respondents to the post-FINPAW survey still felt there were ageist attitudes in the workplace, a view more likely to be held by female respondents, who tended to be more exposed to ageist attitudes than men.[16]

Written by Ella Jordan

This case study is part of a series of international policies that focus on easing the transition to retirement and later life. The case studies and the accompanying report were produced for the Calouste Gulbenkian Foundation (UK Branch).

What did and didn't work

All cases in our Public Impact Observatory have been evaluated for performance against the elements of our Public Impact Fundamentals.

Legitimacy

Public Confidence Good

Finnish attitudes towards government policies were generally positive, as Finland tends to be “a programme-oriented nation”.[6] Studies reported that “the attitude among employers to legislation prohibiting ageism was positive”, despite their not having invested in training for workers aged over 50.[3] However, there is little evidence to show how much the public knew about this particular programme before its launch in 1998.

To raise public awareness of FINPAW, information campaigns were run at the outset of the programme, “carried out with posters, articles in the press and by making use of the channels provided by radio and  television”.[7] Additionally, the Good Age newsletter was distributed to workforce administration and interest groups, and there was a radio programme. “Experience is a National Asset”, whose name was also the progamme’s slogan.

Stakeholder Engagement Fair

FINPAW was a government programme run at a national level. The three main government actors in the programme were: the Ministry for Social Affairs and Health, which was primarily responsible for its management; the Ministry of Labour; and the Ministry of Education. The Ministry of Health and Social Affairs was “responsible for projects in the health and work ability spheres, the Ministry of Labour for projects in the field of employment and the Ministry of Education for lifelong learning.”[17] The government ministries created a supervisory group in relation to the programme, where other stakeholders, such as other ministries and major labour market organisations, were represented.

Outside the three core government ministries responsible for FINPAW, the engagement of other relevant actors was less strong. At FINPAW’s launch in March 1998, Tapani Kahri, deputy managing director of the Confederation of Finnish Industry and Employers, was a member of the media panel. He said that he was “hoping for changes in legislation and attitudes” under the programme, having recognised the inadequacy of the unemployment pension (launched in 1985) and the individual early retirement pension (launched in 1993).[9] On the same panel, Lauri Ihalainen, chair of the Central Organisation of Finnish Trade Unions, “stressed the importance of interchange between work, education, and rehabilitation and [creating] conditions such that workers would thrive more at work so that their desire for retirement would be postponed”.[9]

The labour organisations Employers of the Service Sector (PT), the Union of Industries and Employers (TT), and the Federation of Finnish Enterprises were also critical of the project’s timeframe and felt that “the training requirements and the accompanying administrative measures [had] not been properly thought out”.[9] The trade unions SAK, STTK and AKAVA advocated amendments to “the Labour Protection Act and the Hours of Work Act in favour of older workers”, as well as “the insertion of a clause into the Act on Collective Agreements which would oblige employers to arrange training for older workers as an alternative to dismissal”.[9]

Although the three core ministries showed commitment to FINPAW, the extent to which other stakeholders were involved in the planning stages is not as clear. The social partners’ views on the programme were evident at its launch, but there is little evidence as to any input they may have had in developing the programme and its objectives. In addition, it was noted that the role of civic society associations was not as developed as it could have been. The Executive Summary stated that “there is room for improvement – in particular a greater shift from a ‘government-led’ to a bottom-up ‘civic society’ approach”.[17]

Political Commitment Strong

In 1995, the Rainbow coalition of leftist parties was formed, marking the beginning of relative political stability and little political opposition in Finland. The recession had “led to serious imbalances in public finances and a need for cuts in public expenditure”, hence “the conclusion (at least among the political elite) that the welfare state could not continue to grow”.[13] The changing shape of the labour force increased the risk of older workers’ marginalisation, which could have brought “substantial costs for both companies and the national economy if the ageing of the labour force [did] not come to be seen at an early stage as an element of strength for Finnish working life”.[9]

The government had a clear motivation for addressing the problem of the ageing workforce. A Committee for Ageing Workers was set up in 1996 and proposed a National Programme on Ageing Workers, consisting of “a 40-point programme of measures”, which were clearly divided between the three ministries responsible – the Ministry of Health and Social Affairs, the Ministry of Labour, and the Ministry of Education – all of whom were engaged and supportive of the programme.[17] It is clear that the government was committed to launching a successful programme, and there was no demonstrable political opposition to impede it at any point.

Policy

Clear Objectives Strong

FINPAW outlined six main objectives for the programme (see The Initiative above). The target groups for these objectives extended beyond ageing workers to include “all parties who directly or indirectly influence the status of the over-45s in their working life”, such as managers, labour market organisations, staff at employment offices and teaching staff, among others.[17] The programme’s strategy focused on three concepts: “work ability” (see Strength of Evidence below), employability and employment.[17] To raise public awareness of the programme, different campaigns were run with the intention of disseminating information to ageing workers, professionals, and the public in general.

Evidence Strong

Finland was one the first countries in Europe to face the problem of an increasing ageing population and high unemployment. As a result, FINPAW was one of the first European programmes to reverse previous policies towards ageing workers and their early exit from the labour force.[17] Distinct from and predating FINPAW, the Finnish Institute of Occupational Health had “been systematically collecting information and conducting studies on factors which impinge on the working capacity and the health of the over-50 age group”. Their suggestions, based on previous research, greatly influenced the Council of State's “policy decision on the programme of necessary measures to improve the employability of older workers”.[9]

One key objective that was also based on previous research was developing “work ability”. This was a specifically Finnish concept, developed at the start of the 1990s by the Institute of Occupational Health. It concerned “the interaction between the characteristics of individuals and groups and those of the working environment.”[2] FINPAW drew on the previous “expertise and networks provided by the MWA activities [which formed] a key component in the activities of the FINPAW, both in terms of information and on the operational level”.[4] The MWA’s aim was to bring about improvements for employer and employee alike, leading to “wider gains for society at large, especially when age management is involved”.[2] Using the existing knowledge, FINPAW continued to develop and measure work ability using the MWA Barometer. Previous programmes that shared FINPAW’s aims were the National Productivity Programme in 1993 and the Finnish Workplace Development Programme (TYKE) in 1996, both of which aimed to improve the quality and productivity of working life.

Between 1996 and 1997, the Ministry of Labour carried out an Assessment of the Service Needs of the Ageing Long-term Unemployed (aged 50-58), which adopted the Canadian Government of Alberta’s definition: “an individual’s need for information, career, training and employment services, and financial and non-financial support”.[15] Training events were organised at regional and national levels, with almost 11,000 long-term unemployed being interviewed.[7] The results of the assessment showed that the service needs of ageing workers were “highly individual and differentiated” and “the  co-operation  of  the  Social  Security Institution of Finland, department of social services and health and providers of rehabilitation services resulted in new modes of action and service models that were tested and improved in connection with the assessment of service needs.” In 1998, the assessment was conducted on a national level, and the following year almost 6,000 ageing, long-term unemployed workers were directed “to rehabilitation provided by the Social Security Institution of Finland”.[7]

Feasibility Strong

FINPAW’s three ministries were allocated an annual budget of FIN25 million (EUR4.2 million) for the programme,[17] which in 1997 was 0.013 percent of the FIN190.3 billion (EUR32 billion) state budget.[12] The Ministry of Education committee proposed funding “for teachers’ continuing professional education in the priority areas defined in education policy”.[7] Each year, the division of funding was decided by the management group upon confirmation of the government budget.[7]

In 1996, new legislative amendments were proposed in line with the programme’s objectives. A paragraph stating that “personnel and training plans should seek to devote attention to the special needs of ageing workers and officials” was to be added to the Act on Codetermination in Companies. Additionally, the Occupational Safety Act was amended to add “ageing to the list of issues that employers must take into account in addition to age, gender, vocational skill, etc., while [another amendment] added workplace health promotion to the programme that employers are required to have for the promotion of safety and health in the workplace”. Furthermore, by the programme’s end in 2002, a new Occupational Health Care Act had come into force.[16]

Extensive training was made available to training providers. An educational alliance was established under the leadership of the Finnish Institute of Occupational Health, comprising “leading educational organisations and institutes in the field of management and leadership training” from both the public and private sectors. Furthermore, “The Ministry of Education, the National Board of Education and the Education and Culture Departments of State Provincial Offices... made a concerted effort  to  improve  the  situation  by  allocating  some  FIM45  million  annually  for  teachers' continuing  professional  education  in  the  priority  areas  defined  in  education  policy”.[7]

Action

Management Strong

The management of FINPAW was undertaken by three government ministries (see Stakeholder Engagement above), which were praised for the efficiency of their work and cooperation. The follow-up report on the programme in 2000 noted that “through target agreement negotiations the different units of the Ministry of Social Affairs and Health and the institutions subordinate to the Ministry have been able to realise the aims of the National Programme for Ageing Workers”.[7] Similarly, in 2003 the Social Development Company Ltd.’s assessment noted “a lot of satisfaction in the new level of cooperation of different ministries, officials and experts, across borders in the implementation of the FINPAW”, who were each represented on an advisory board for the programme.[4]

Measurement Strong

Measurement was a central part of FINPAW with reviews of the programme undertaken annually.[4] Furthermore, using its own evalution and monitoring systems a designated group was set up to monitor the programme.[16] The areas that were monitored were:

  • How well ageing workers were able to continue in working life
  • The unemployment rate of ageing workers
  • Ageing workers’ tendency to take early retirement
  • Trends in the targets areas of work ability and vocational skills
  • Actions, such as workplace health promotion, that were promoted by the programme.[16]

In addition, the MWA-Barometer was developed further. The ministries responsible for the implementation of the programme carried out their own follow-up studies of each of their projects, which they then published.[17] The MWA-Barometer measured instances of age discrimination experienced by ageing workers in each year of the programme. It compared the survey results with data from 1997, although the data is not wholly comparable due to the use of different metrics in different years.[16]

The programme was externally evaluated by the Social Development Co Ltd in 2003. As the programme drew to an end, a survey was conducted among a stratified random sample of the population as well as a questionnaire that was sent to 320 experts, 173 of whom replied (a 54 percent participation rate). Each of these methods had the aim of finding out what the public and experts knew of FINPAW and what their attitudes were towards the programme and its aims (see Public Impact above).[4]

Alignment Strong

It was noted in peer reviews that the cooperation between the three ministries responsible was one of FINPAW’s key strengths (see also Management above).[16] The programme was reviewed internationally at a meeting held in Helsinki in October 2001, where “the wide consensus among policymakers in Finland on the importance of helping ageing workers stay in work, and the strong role taken by occupational healthcare in development action were mentioned among Finland’s strengths in the Peer Review discussions”.[16] The European Commission noted that Finland set a good example “for collective departmental or multi-agency approaches at government level in creating conditions under which age management might better flourish at organisational level. [Finland] also recognises the importance of encapsulating and transmitting to wider groups of actors the knowledge acquired in development work concerned with age management.”[2]

Social partners and social scientists were actively involved on behalf of employers and trade unions. At the conclusion of the programme, the deputy general director of the European Commission's Directorate General for Employment and Social Affairs, Juhani Lönnroth, stated that “even if Finland is a small country on the EU scale, it can, through its contribution, influence two aspects: on the one hand, the results, i.e. growth in the employment rate in the EU as a whole; and improvement of the indicators applied to ageing persons”. He added that Finland acted as a reminder to other European countries of the importance of dealing with ageing problems.[5]

Further programmes that developed FINPAW’s work were:

  • Well-Being at Work 2000-2003, which focused on developing work ability
  • the European Social Fund 2000-2006 which promoted employment and lifelong learning [4]
  • Veto (Attractiveness of Working Life) 2003-2007, whose aim was to increase the quality of working life

The Finnish Ministry of Education and Culture’s Noste (Lift) programme (2003-2009), which involved raising the education levels of 30- to 59-year-olds.[10]