The gender pension gap continues to be a significant issue in the European labour market, where women are at a disadvantage compared to men in terms of retirement income.
The gender pension gap is not only a result of the labour market but also of pension policies. Many European countries have pension systems based on a ‘pay-as-you-go’ model. As a result, women who have lower lifetime earnings and are more likely to have had career breaks receive smaller pensions than men. Pension systems that are based on the number of years worked, such as those in France, the Netherlands, and Spain, also disadvantage women.
Even in Nordic countries – where there are high rates of female employment and often ranked among the most gender-equal countries in the world – there is a gap between women’s and men’s pensions. However, the size of the gap varies considerably between 28% in Sweden and 5% in Iceland, according to the Nordic Council of Ministers.
The gender pension gap is not only an issue in terms of social justice but also has economic implications. Women tend to live longer than men, and they are more likely to face poverty in old age. The gap can also have consequences for the wider economy, as women with insufficient retirement income may have to rely on state benefits, which can be a burden on public finances.
To address the gender pension gap, European countries need to adopt policies that ensure women are not disadvantaged in the workforce or pension systems. This could include measures to encourage women’s participation in the labour market, such as affordable childcare and flexible working arrangements.
There should also be policies to promote equal pay and reduce the gender pay gap, as well as measures to recognise the unpaid work that women do, such as caring for children and elderly relatives.
Additionally, pension policies should be reformed to ensure that they do not disadvantage women – for example, by introducing pension credits for those who take career breaks for caring responsibilities.
In an environment marked by high inflation and increased interest rates that affect people’s living costs, it is of the utmost urgency that the gender pension gap is addressed to promote equality and economic sustainability.
Venilia Amorim, Editor, IPE.com