Gender gap in pensions persist in spite of extended working lives

The working lives of men and women are almost equally long, but women still get lower old-age pensions than men. The problem lies in women’s lower wages and their work history. Extending working lives alone will not fix the gender gap in pensions, researchers at the Finnish Centre for Pensions argue. 

This study focuses on new retirees in Finland in 2011. The study results speak of the gender division in labour markets.

“The calculations reveal that the length of working lives of men and women is remarkably similar. Yet men earn more pension than women do,” says Susan Kuivalainen, Head of Research at the Finnish Centre for Pensions.

Women work two years less

Half of the Finns who retired in 2011 had worked for at least 37.6 years. The median working life spanned 38.5 years for men and 36.6 years for women. The self-employed and farmers had the longest working lives.

“The working lives of Finnish women stand out in a European comparison. They work longer than women in most European countries,” Kuivalainen explains.

Although many Finns have long working lives, only slightly more than half of the new retirees retired from work in 2011. Nearly half retired from unemployment or some other pension benefit, such as the disability pension.

Women’s pensions 25% below men’s

Despite long working lives, the average old-age pension for women in 2011 was 27 per cent below men’s. The reason for the pension gap can be found in the wage and working history of women.

“Although Finland has gone far in terms of gender equality compared to many other countries, gender inequality persists in the labour markets. On average, women’s wages are 80 per cent of men’s. In addition, women work part-time and for fixed periods more often than men,” explains Satu Nivalainen, Economist at the Finnish Centre for Pensions.

Gender gaps cannot be fixed by extending working lives, the researchers state.

“A long working life benefits primarily men’s pensions. In terms of equality, the gap between men’s and women’s wages should be narrowed,” Nivalainen concludes.

National pension to every third woman

The structure of pension income is also different for men and women. Most men get only earnings-related pensions while many women get both an earnings-related and a national pension.

The national pension is granted if a person gets no or only a small earnings-related pension.

“In 2011, roughly 30 per cent of the new female retirees got both an earnings-related and a national pension. The share of women getting a national pension is twice as high as that of men,” explains Noorna Järnefelt, Senior Researcher at the Finnish Centre for Pensions.

The earnings-related pension is the most important pension income for white collar workers. Only about 5 per cent of them also get a national pension.

Unique register data that spans 50 years

The study on gender gaps in pensions in Finland is significant in an international context, as well.

“We have access to unique register data that spans 50 years. Previous research in other countries have been based mainly on interview surveys”, says Kati Kuitto, Senior Researcher at the Finnish Centre for Pensions.

The Finnish earnings-related pension system deviates from the pension systems in many other countries, which do not provide insurance for work that is typically done by women or small wages. The Finnish pension system covers nearly all income from work and offers the same benefits under the same terms for all.

“Research about Finland offers useful observations on gender equality in the labour market and pensions, as well as on the importance of minimum pensions to narrow the pension gap,” Kuitto explains.

Data on 65,000 Finns

The study of the researchers at the Finnish Centre for Pensions, Length of working life and pension income: empirical evidence on gender and socioeconomic differences from Finland, was published in the Journal of Pension Economics & Finance in September this year.

The study reviews the data on people who retired in 2011. The length of the working life, the amount and structure of the pension income of 65,000 persons was analysed. The pension income included statutory earnings-related and national gross pensions.

More information

Susan Kuivalainen, Head of Research, phone +358 29 411 2184, susan.kuivalainen(at)

Satu Nivalainen, Economist, phone +358 29 411 2151, satu.nivalainen(at)

Noora Järnefelt, Senior Researcher, phone +358 29 411 2152, noora.jarnefelt(at)

Kati Kuitto, Senior Researcher, phone +358 29 411 2479, kati.kuitto(at)

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