Research Conference Addressed Concern for Women’s Pensions

Nearly one hundred experts gathered at the international research conference of the Finnish Centre for Pensions on 18 May 2018 to look for solutions to narrow the gap between men’s and women’s pensions. The solutions to improved pensions for women lie in working lives, wage levels and family policy.

Women’s pensions are nearly 40 per cent lower than men’s in Europe. The pension gap has not narrowed in the past ten years.

Francesca Bettio, the keynote speaker and professor of economics at the University of Siena, estimated that women’s pensions can be improved by raising the employment rate and extending the working lives of women.

“Measured in years of employment, women in EU countries still have shorter working lives than men. But now they are accruing working years at a faster pace than men.”

Bettio does not believe that the gender gap between men’s and women’s pensions will be fixed that quickly. As a matter of fact, it can go the opposite direction.

“Women work part-time more often than men do. If part-time work becomes more common, the combined wage sum of women will not reach the earnings level of men,” Bettio explains.

Women’s  retirement income is further weakened by a growing divorce rate among elderly couples. A divorce dramatically reduces the income of many female retirees. The fact that families are less-and-less able to help their elderly parents and relatives at home makes the situation even worse. As a result, the elderly have to spend a big part of their income to buy services. In addition, retiring women are accustomed to consume more. When their income drops as they retire, they face everyday economic challenges.

Maternity penalty weakens wages and pensions

Katja Möhring, interim professor at the University of Mannheim, reminded the conference audience that motherhood still weakens women’s pensions.

“For example, in Italy and France, women with children have lower pensions than women who don’t have children,” Möhring says.

The lower pensions of mothers is mainly due to their weaker wage level compared to childless women. According to Möhring, the weaker wage level of women in many western countries speaks of a so-called ‘maternity penalty.’

Improved family policies needed

Rense Nieuwenhuis, associate professor at Stockholm University, calls for better family policies in Europe. If women were to get a larger part of the household income than they do today, the inequality would diminish. Family policies should encourage men to stay at home and look after the children and women to return to work after childbirth sooner than they do today.

“In most countries, family policies are still based on the assumption that the man is the primary breadwinner of the family. When family policy takes into account both adults in the family, women’s employment rates, wage development and pensions will take steps in the right direction and improve,” Nieuwenhuis comments.

Women’s earnings lag behind also in Finland

Kati Kuitto, senior researcher at the Finnish Centre for Pensions, presented preliminary results from research in progress of the risks of women’s working lives.  According to Kuitto, by the age of 36, Finnish women and men have accrued, on average, an equally long working life (measured in working hours). Yet women’s average earnings are only 70 per cent of men’s.

“Based on preliminary results, it would seem that current parental leaves significantly lower women’s income both short and long term. This is reflected in women’s pensions,” Kuitto explains.

The final session at the conference was a panel discussion chaired by Mikko Kautto, director at the Finnish Centre for Pensions. The panelists included Juhana Vartiainen (MP, National Coalition Party), Anna Rotkirch (Director, Family Federation of Finland) and Ilkka Kaukoranta (Chief Economist, Central Organisation of Finnish Trade Unions SAK).

Read more

Keynote speakers’ presentations in SlideShare:

View the presentations in YouTube

Gender Gaps in Pensions in Finland (SlideShare)


Photo: Karoliina Paatos