According to a recent note on Finland in the OECD's Going For Growth 2009 report, Finland should "abolish the special treatment of unemployed workers aged 59 and over (the 'unemployment pipeline') with a view to lifting the effective retirement age."
The OECD further strongly suggests that disability pensions be granted only on medical grounds "rather than on social criteria as permitted under the current system".
The report was published in Paris on Tuesday.
The OECD has on previous occasions (see linked article from June 2008) criticised Finland for its lax attitude towards allowing people to retire early.
The most recent barbs appeared in a report from November of last year.
The contents of this latest critical note were formulated in January of this year, so there is no reference to the recent pensions package proposed by the government of Prime Minister Matti Vanhanen.
However, the message contained is almost as if it were taken directly from the background papers of the government and the Ministry of Finance.
In its controversial proposals of last week, the government left open what it proposed to do about the "unemployment pipeline" or disability pensions in the near future.
According to the OECD, those who retire early in Finland become passive, when many of them could in fact be still in active work.
Finland should seek to activate pensioners back into working life by improving financial incentives. The organisation notes that income tax rates on any work carried out by retired persons are exceptionally severe in this country.
There are also calls to increase the workforce at the early end of working life by reducing the waiting time to gain entry to tertiary education, in order to lower the average age of university students, which is currently amongst the highest in Europe.
We are further urged to continue to reduce taxes on earned income at the same time as weakening the net of unemployment benefits and "promoting employment and economic flexibility by negotiating a larger share of annual wage increases at the firm level [and] allowing opt-out clauses from central collective agreements, thus making wages more responsive to local conditions".
Unemployed persons should be required to relocate if they are offered employment in other regions of the country.
The OECD believes that moves such as these would enable Finland to improve its GDP-per-capita convergence with the best performing economies.
