Etla begins to study challenges and consequences of population ageing

Etla is launching a multiannual research project studying consequences of a population ageing and seeking solutions to ensure the sustainability of the welfare state arising from ageing. In addition to the various phases of the individual life course, the project also focuses on the implications of demographic change on both the macroeconomy and public finances. In the project, Etla is looking for answers e.g. to the causal effects of educational choices on birth rates and improving the resilience of the welfare state. The research project is funded by The Strategic Research Council (SRC).

Etla is part of the large consortium aiming to improve understanding of the causes, consequences and solutions to the ageing population and the sustainability challenges it poses. The research project Life course and economic implications of demographic change (LIFECON) is funded by The Strategic Research Council (SRC). The project will run until 2024 but it is also eligible for a three-year extension.

The project consortium includes Etla Economic Research, University of Helsinki, and the Finnish Institute of Occupational Health, who leads the project. At Etla, Research Director Antti Kauhanen is responsible for the project.

– The economic impacts of demographic change are extremely complex, and in this research project Etla, in collaboration with other parties of the consortium, seeks to study the phenomenon comprehensively, says Etla’s Kauhanen.

The research project focuses on various phases of the individual life course and studies how demographic changes affect macroeconomics and public finances. The project will provide policy recommendations that will help to ensure the sustainability of the welfare state as the population ages and increase individual, societal, and intergenerational wellbeing.

Does educational choice affect birth rate?

Numerous comprehensive sub-studies, in connection with the research project, will be launched in Etla. Among other things, Etla examines how educational choices affect family formation and birth rates. In addition, the impacts of adult education on careers and the effects of raising the upper limit of the flexible retirement age on retirement and the health of those continuing to work are studied. Etla also studies alternative ways to pursue a financially sustainable fiscal policy in ageing Finland.

The size and age-related nature of welfare state expenditures mean that the balance of public finances is sensitive to demographic changes. The accuracy of population projections is weak in the long term, which emphasizes the flexibility of the tax and expenditure policies, points out Tarmo Valkonen, Research Advisor at Etla.

– At Etla, we are developing new rule-based ways for adapting to demographic and economic surprises. An example of this is automation, which links the size of the new birth cohorts to pension benefits and contributions. The sub-study is a continuation of Etla’s research tradition, the aim of which is to improve the resiliency of welfare state funding, Valkonen says.


The research project “Life course and economic implications of demographic change (LIFECON)” is part of a larger Academy of Finland’s research program which seeks research-based solutions for adapting to changes in the population’s age structure and maintaining the functional and renewal capacity of society. The research project is funded by The Strategic Research Council (SRC), which operates in connection with the Academy of Finland.

Official website of the project



A large group of researchers from Etla are participating in the project. Besides Research Director Antti Kauhanen and Research Advisor Tarmo Valkonen, Chief Research Scientist Hanna Virtanen, Researchers Krista Riukula and Päivi Puonti and Research Director Tero Kuusi are included in the project.