Nordic responses to extending working life.

Abstract

A challenge posed by the demographic transition is the funding of the welfare state, which, in the Nordic countries, is relatively generous, and will have to serve growing proportions of older citizens in need of home-help services and nursing homes. Both active workers and pensioners pay income tax. However, by keeping older workers in working life for longer, the tax revenue increases while pension expenses for the government decreases. This is a means to meet that challenge and boost the sustainability of the welfare state.