Gender pension gap – economic

perspective

Agnieszka Chłoń-Domińczak

Institute of Statistics and Demography SGH

Part of this research was supported by European Commission 7th Framework Programme project

"Employment 2025: How will multiple transitions affect the European labour market' (NEUJOBS)

Outline

• Life course changes and challenges in the light

of population ageing

• Gender pension gap: current and future

perspective

▫ Changing labour market patterns

▫ Changing pension system design

• How to measure gender pension rights gap

• Policy challenges

Rationale

• In most of the countries there is a current

pension gap, measured by differences in

pension levels of men and women

• The gender gap is a result of:

▫ Gender differences in labour market

participation (wages, employment rates)

▫ Pension system design (retirement age, pension

formula)

Length of pension coverage depends both of on

the labour market entry and exit agesSpain Sweden

Age profile of employment rates

Hypothetical years in employment

0,00

0,10

0,20

0,30

0,40

0,50

0,60

0,70

0,80

0,90

15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64

pe

r ce

nt

age group

1992 - women 2001 - women 2011 - women

0,00

0,10

0,20

0,30

0,40

0,50

0,60

0,70

0,80

0,90

15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64

pe

r ce

nt

age group

1996 - women 2001 - women 2011 - women

0

5

10

15

20

25

30

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

30

31

32

33

34

35

36

37

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

Current vs. future replacement

rates – projected change

Source: The 2015 Pension Adequacy Report: current and future income adequacy in old age in the EU

Career breaks for child-care and

pension rights

Type of trend Countries

1. Increases from the full-career

case and decreases afterwards

(2): Germany, Italy

2. Stable during the child-care

breaks (no change)

(1) Ireland

3. Stable for first few care years

and declining thereafter

(6) Belgium, Czech Republic,

Luxembourg, Portugal, Spain, Malta

4. Decreases modestly from the

full career case

(6) Austria, Denmark, Finland, Greece,

Netherlands, United Kingdom

5. Stronger declines in

replacement rates

(11) France, Hungary, Poland, Slovak

Republic, Sweden, Bulgaria, Estonia,

Latvia Lithuania, Romania, Slovenia

Source: (D’Addio 2013)

Future gender pension gap depends both on

labour market and pension system factors

Pension rightsgap

Labour market

Employmentyears gap

Wage gap

Pension system

Career breakgap

Low wage redistribution

Pension indexation

Retierement age

differential

Current vs future

-30

-20

-10

0

10

20

30

40

50

60

70

80

Est

on

ia

Slo

va

kia

La

tvia

Cze

ch R

ep.

Hu

ng

ary

Lit

hu

an

ia

Po

lan

d

Slo

ven

ia

Ro

ma

nia

Bu

lga

ria

Den

ma

rk

Ma

lta

Fin

lan

d

Bel

giu

m

Ita

ly

Po

rtu

ga

l

Sw

ed

en

Au

stri

a

Sp

ain

Irel

an

d

Gre

ece

Cy

pru

s

Fra

nce

Net

he

rla

nd

s

UK

Ge

rma

ny

Lu

xe

mb

ou

rg

Current Gender Pension Gap Future Gender Pension Right Gap

Distribution of EU 27 countries by

the domain specific indices

Labour market equality

High Medium Low

Pen

sion

sys

tem

co

mp

ensa

tio

n High

(4) SI DK UK NE

(3) DE LT BE

(2) EE CZ

Medium (3)

CY LU FI SE (3)

IE AT LU (2)

MT ES

Low (1) PT

(4) PL FR LV BG

(5) IT RO SK HU EL

Conclusions

• The results of analysis show that countries that

have little gender differences in labour markets

also tend to have pension system policies that

are gender-friendly

• Countries with high gender differences, pension

systems often do not compensate them at

retirement

• There is a need for more life course

perspective in both labour market and

retirement policies, taking into account the

complimentary role of these policies

Conclusions

• The position of women in labour market and

family context is changing

• Policy responses to population ageing include

both changes in labour market and pension

systems that affect gender differently

▫ increases in the labour market participation of

prime-aged women,

▫ prolonging working lives

▫ increasing labour market exit ages of women

▫ raising retirement age

▫ reducing the progressivity in pension formulae,

Conclusions

• Full understanding of transition from work to

retirement requires the assessment of both sides of the

coin

• Women lose twice in most of the pension schemes –

because they earn less and because they have shorter

working lives

• Many researchers refer to these gaps, but rarely they

are seen as correlated phenomena – women with

shorter working lives have usually lower earnings at the

same time

• Gender is important in combined labour market and

pension system perspectives

Further reading:

FEMALE TRANSITION TO RETIREMENT

Neujobs project working paperhttp://www.neujobs.eu/sites/default/files/D16.2B.pdf

WOMEN’S WORK AND PENSIONS. DRAWING LESSONS FROM

CENTRAL AND EASTERN EUROPE

In. B.Marin(ed.) The Future of Welfare State in a Global

Europehttp://www.euro.centre.org/data/1441432754_18933.pdf

Contact: agnieszka.chlon@gmail.com