University of Oulu

Lähderanta, T., Salonen, J., Möttönen, J., and Sillanpää, M. J. (2022) Modelling old-age retirement: An adaptive multi-outcome LAD-lasso regression approach. International Social Security Review, 75: 3– 29.

Modelling old-age retirement : an adaptive multi-outcome LAD-lasso regression approach

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Author: Lähderanta, Tero1; Salonen, Janne2; Möttönen, Jyrki3;
Organizations: 1University of Oulu, Oulu, Finland
2Keva, Helsinki, Finland
3University of Helsinki, Helsinki, Finland
Format: article
Version: published version
Access: open
Online Access: PDF Full Text (PDF, 4.3 MB)
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Language: English
Published: John Wiley & Sons, 2022
Publish Date: 2022-04-26


Using unique administrative register data, we investigate old-age retirement under the statutory pension scheme in Finland. The analysis is based on multi-outcome modelling of pensions and working lives together with a range of explanatory variables. An adaptive multi-outcome LAD-lasso regression method is applied to obtain estimates of earnings and socioeconomic factors affecting old-age retirement and to decide which of these variables should be included in our model. The proposed statistical technique produces robust and less biased regression coefficient estimates in the context of skewed outcome distributions and an excess number of zeros in some of the explanatory variables. The results underline the importance of late life course earnings and employment to the final amount of pension and reveal differences in pension outcomes across socioeconomic groups. We conclude that adaptive LAD-lasso regression is a promising statistical technique that could be usefully employed in studying various topics in the pension industry.

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Series: International social security review
ISSN: 0020-871X
ISSN-E: 1468-246X
ISSN-L: 0020-871X
Volume: 75
Pages: 3 - 29
DOI: 10.1111/issr.12287
Type of Publication: A1 Journal article – refereed
Field of Science: 5142 Social policy
Copyright information: © 2022 The Authors. International Social Security Review published by John Wiley & Sons Ltd on behalf of International Social Security Association. This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.