Are you a young person new in the labor market? If so, you should know that on average 32.5 years of work and 4.1 years of unemployment await you.
"A young person aged 18 entering the labour market can expect to have 32.5 years of employment and 4.1 years of unemployment during their working career." This is the conclusion of a recent analysis by the Ministry of Economic Affairs and Employment for people aged 18 entering the labour market. The result reflects the average expectation for each 18-year-old based on the situation in 2017. The analysis is based on a breakdown of an individual’s life cycle activities.
Working life expectancy has grown. Especially for the elderly, the expected number of working years has risen by several years since the 1990s recession. In the 2010s alone, the working life expectancy for a 50-year-old has grown by about one year.
Calculations based on population and labour force data clearly indicate the long duration and significant economic impact of unemployment. "The results of the analysis highlight the need to extend working careers," said the Ministry of Economic Affairs and Employment. The life cycle approach provides a new, essential element for understanding labour force participation, employment and unemployment.
In 2017, the life expectancy outside employment exceeded the working life expectancy already at the age of 29. At the same time, every young person entering the labour market could expect on average more than four years of unemployment during their working careers.
The analysis of the Ministry of Economic Affairs and Employment examines participation in the labour force, employment and unemployment using the life cycle approach. The analysis is based on life expectancy data provided by Statistics Finland.
The working life expectancy for an 18-year-old was 32.5 years, for a 25-year-old 29 years, and for a 50-year-old 10 years. The unemployment expectancy for an 18-year-old was 4.1 years, for a 25-year-old 3.5 years, and for a 50-year-old 1.4 years, according to the official data.
These figures indicate the number of years a person of a certain age can expect to be employed or unemployed if their labour force participation remained at the 2017 level and their life expectancy remained unchanged. However, in real life changes do occur; unemployment expectancy in particular can change quickly as the labour market situation changes.
The life expectancy outside employment will exceed the working life expectancy at the age of 29 or 36, depending on the data set used. Based on calculations made with register-based data, the life expectancy outside employment will exceed the working life expectancy at the age of 29.
The 4.1-year unemployment expectancy of a young person means that for each person entering the labour market, more than 34,000 euros on average would be spent by the central government on their unemployment security alone at the current benefit and price level.