How Do Gendered Labour Market Trends and the Pay Gap Translate into the Projected Gender Pension Gap? A Comparative Analysis of Five Countries with Low, Middle and High GPGs
Abstract
:1. Introduction
2. Socio-Economic Context
2.1. Gender Gaps in the Labour Market
2.2. Gender Difference in Employment Rates
2.3. Gender Difference in Wages
2.4. Recent Evolution of the Gender Pension Gap
3. Pension Regulations
4. Methodology and Pension Models
4.1. Variant GPG Definitions and Alternative Scenarios
4.2. Microsimulation Modelling Framework
5. Results
5.1. Base-Scenario Results
5.2. Variants and Alternative Scenarios
5.2.1. GPG and the Coverage Gap
5.2.2. Impact of Survivors’ Pension
5.2.3. GPG When Assuming That Current Labour Market Outcomes Are Kept Constant
5.2.4. Gender Pension Gap Projections When Equalising Labour Market Status and Pay
6. Discussion
Author Contributions
Funding
Informed Consent Statement
Acknowledgments
Conflicts of Interest
Appendix A
Country | Aggregate Replacement Rate (1) | Retirement Ages | |||
---|---|---|---|---|---|
M | F | Early (2) | Normal (3) | Future (3) | |
EU27 | 0.56 | 0.53 | |||
BE | 0.47 | 0.46 | 63 | 65 | 67 |
LU | 0.99 | 0.95 | 62 | 62 | 62 |
SI | 0.43 | 0.42 | 60 | 62 | 62 |
PT | 0.67 | 0.64 | 62 | 65.3 | 68 |
CH | 0.55 | 0.57 | 63 | 65 (M), 64 (F) | 65 (M), 64 (F) |
Appendix B. A Discussion of Dynamic Microsimulation of Pensions
1 | The Gender Pension Gap (GPG) measures the relative difference between the pensions of women and men. In a general form, the GPG(l, x) can be written as ; usually l is the mean of the variable of interest, x, e.g., gross pension income, though l can be any measure of location. |
2 | The official name is the Working Group on Ageing Populations and Sustainability of the Economic Policy Committee. |
3 | Further details can be found in the national reports: Dekkers and Van den Bosch (2021), for Belgium; Liégeois (2021), for Luxembourg; Moreira and Wall (2021), for Portugal; Kump and Stropnik (2021), for Slovenia, and Kirn and Bauman (2021), for Switzerland. |
4 | Gender pay gap in unadjusted form in industry, construction, and services (except public administration, defence, compulsory social security). Source: Eurostat, EARN_GR_GPGR2. This indicator reflects the difference between average hourly earnings of male and female employees working in firms with at least 10 employees, expressed as a percentage of the former. |
5 | Indeed, women already are more likely than men to provide informal care (OECD 2020, p. 3) and they provide more hours of informal care. As informal care is often accompanied by a reduction or abandonment of professional activity by the caregiver (Ciccarelli and Van Soest 2018; European Commission and Social Protection Committee 2021a, pp. 83–84), the gender difference in informal care-responsibilities adds to the Gender Pension Gap (Bettio et al. 2013; Burkevica et al. 2015). |
6 | https://ec.europa.eu/eurostat/web/products-eurostat-news/-/DDN-20200207-1. See also the two most recent Pension Adequacy Reports (European Commission and Social Protection Committee 2018, 2021b), and the 2019 Report on Equality between Women and Men in the EU (European Commission 2019, Figure 6, p. 24). |
7 | Third-pillar private pensions are not discussed in this article. |
8 | |
9 | |
10 | This section is based on European Commission and Social Protection Committee (2021c) for the four EU countries, and on Kirn and Bauman (2021) for Switzerland. Note that the state of the various pension systems are being included as they were up to early 2021, analogous to the projections of the AWG. This includes all forward-looking measures that were legislated at the time of our modelling. An example of the latter are the future increases of the pensionable age in Belgium and Portugal and gender-neutral pension calculation rules in Slovenia. |
11 | Self-employed people and other non-insured persons can contribute voluntarily. |
12 | A special arrangement in the Swiss first-pillar pension is that years of care for children below 16 years are counted as contributory years at a rate of three times the minimum pension. |
13 | See European Commission (2021b, Figure 30, p. 77). Figures not available for Switzerland. |
14 | A particular issue in this context is the decision to retire. In the Slovenian model, individuals most often retire as soon as they are eligible, but they can decide to work up to 3 years longer (based on the probability). In the other models, however, the retirement decision before the statutory retirement age (i.e. early retirement) is mostly the negative result of the labour market equations, i.e., follows from not remaining in the labour market. Once an individual ceases to work at an older age, which is the result of the combination of behavioural equations and alignment tables by age and gender, then the a priori risk of entering into one of the alternative states (unemployment, disability, etc.) becomes very low if he or she is eligible for retirement, with the result that he or she will very likely retire. At the statutory retirement age, all individuals will by definition enter retirement. |
15 | Figures for 2019. Eurostat, table “lfsa_eppgacob”. |
16 | Each month counts towards the minimum contributory period as soon as 64 h of work have been registered. Furthermore, “surplus” hours worked can be transferred from one month to the next. Therefore, if working 20% of a full time job, one month of every second month counts as a contributory period. Finally, contributory periods include unemployment, registered care periods, and maternity leave. |
17 | In 2018, expenditures on old-age and survivor pensions were equal to 9.6% and 1.6% GDP in the EU-27 as a whole (European Commission and Social Protection Committee 2021b, p. 35). |
18 | The impact of survivors’ pension could not be determined in the model for Switzerland. |
19 | Do note that this scenario does not mean that individuals remain in the state that they occupy in 2021, but rather that the proportional sizes of the various labour market states remain at their 2021 levels. In the reference scenario, the proportional sizes of the various (labour market) states by age and gender change over time. For example, the activity rate among women increases towards that of men; unemployment rates decrease, etc. All these developments are blocked in the constant scenario. However, even though the proportional sizes of the various categories remain constant, individuals still move from one state to another. |
20 | For Portugal, only private employment and self-employment rates are equalised. The relative shares of public workers and civil servants remain unchanged (Moreira and Wall 2021). |
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Country | Active Persons | Older Persons (Men/Women) | |||
---|---|---|---|---|---|
Occup | Personal | Public | Occup | Personal | |
BE | 59.6 | 38 | 98.8/83.1 | 2.4/1.5 | 3.3/1.5 |
LU | 5.1 | .. | 96.4/92.0 | 9.5/1.6 | 4.2/1.7 |
SI | 36.5 | 1.4 | 90.2/87.6 | 1.1/0.7 | 1.8/2.1 |
PT | 3.7 | 4.5 | 87.2/78.8 | ../.. | 0.8/1.0 |
CH | 56.8/43.2 | .. | 97.6/98.7 | 82.9/69.5 | 45.1/34.9 |
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Dekkers, G.; Van den Bosch, K.; Barslund, M.; Kirn, T.; Baumann, N.; Kump, N.; Liégeois, P.; Moreira, A.; Stropnik, N. How Do Gendered Labour Market Trends and the Pay Gap Translate into the Projected Gender Pension Gap? A Comparative Analysis of Five Countries with Low, Middle and High GPGs. Soc. Sci. 2022, 11, 304. https://doi.org/10.3390/socsci11070304
Dekkers G, Van den Bosch K, Barslund M, Kirn T, Baumann N, Kump N, Liégeois P, Moreira A, Stropnik N. How Do Gendered Labour Market Trends and the Pay Gap Translate into the Projected Gender Pension Gap? A Comparative Analysis of Five Countries with Low, Middle and High GPGs. Social Sciences. 2022; 11(7):304. https://doi.org/10.3390/socsci11070304
Chicago/Turabian StyleDekkers, Gijs, Karel Van den Bosch, Mikkel Barslund, Tanja Kirn, Nicolas Baumann, Nataša Kump, Philippe Liégeois, Amílcar Moreira, and Nada Stropnik. 2022. "How Do Gendered Labour Market Trends and the Pay Gap Translate into the Projected Gender Pension Gap? A Comparative Analysis of Five Countries with Low, Middle and High GPGs" Social Sciences 11, no. 7: 304. https://doi.org/10.3390/socsci11070304
APA StyleDekkers, G., Van den Bosch, K., Barslund, M., Kirn, T., Baumann, N., Kump, N., Liégeois, P., Moreira, A., & Stropnik, N. (2022). How Do Gendered Labour Market Trends and the Pay Gap Translate into the Projected Gender Pension Gap? A Comparative Analysis of Five Countries with Low, Middle and High GPGs. Social Sciences, 11(7), 304. https://doi.org/10.3390/socsci11070304