- Link to scientific article: Rowold, C., Struffolino, E., & Fasang, A. E. (2024). Life-Course-Sensitive Analysis of Group Inequalities: Combining Sequence Analysis With the Kitagawa–Oaxaca–Blinder Decomposition. Sociological Methods & Research, 0(0).
For a long time, research on pension inequalities focused only on male workers, concentrating for example on differences between more and less educated workers. In recent decades, however, more and more women – who entered the labour market in the second half of the 20th century – have reached retirement age. The study of gender inequalities in retirement incomes (the so-called Gender Pension Gap - GPG) is an important basis for understanding the mechanisms that determine the accumulation of disadvantages over the individual life course.
The GPG is the percentage difference in average retirement income between men and women net of individual characteristics such as age and educational qualifications; a difference that is mainly attributed to the different labour market attachments of women and men. Women, in fact, are more likely than men to experience interrupted career paths due to caring duties, and they receive lower wages partly because they are over-represented in part-time and fixed-term work. These dynamics contribute to lower pension returns for women and in some cases to their failure to fulfil the minimum eligibility requirements.
But is the GPG really only explained by the fact that men and women experience different career paths? The short answer is 'no'. We develop the long answer below.
Taking the life course seriously to study gender inequalities
The life course approach suggests that in order to conduct a genuinely gender-sensitive analysis, such as the one we should strive for by studying the GPG, it is necessary to consider the interaction between work and family trajectories throughout the life course, precisely because of the persistent gender imbalance in care tasks. This imbalance impacts on the actual possibility for women to participate in the labour market by constructing work trajectories that not only make them autonomous when they are active but also give them access to decent pension benefits.
In a comparative study on Italy and Germany, Carla Rowold (Max-Planch Institute for Demographic Research), Emanuela Struffolino (University of Milan) and Anette E. Fasang (Humboldt-Universität zu Berlin) investigated the extent to which the interaction between family and work trajectories throughout the life course contributes to the gender gap in pension treatment. For each individual, family trajectories (according to marital status and the presence of one or more children) and employment trajectories (according to position in and out of the labour market, distinguishing, for example, between part-time and full-time work and employment in the public sector) were reconstructed from the age of 18 to 65. The analysis of life courses from the ages of 18 and 65 was possible thanks to the availability of retrospective and prospective longitudinal data from the SHARE-Survey on Health, Aging, and Retirement in Europe, which follows the same individuals over time and collects information on their past.
Germany and Italy differ in many welfare policy domains and yet they share one of the highest GPGs in Europe: 48.8% and 46.9% respectively. Although their pension systems are not equivalent, both are described as particularly disadvantageous for women: this is due to the close link between wages and accumulated contributions, which then translates into more or less generous pension benefits. In both countries, in fact, a large share of women leave the labour market after the birth of their first child and struggle to get back into full-time jobs mainly due to the scarcity of childcare facilities.
Between segregation and discrimination: two mechanisms in action
Using sequence analysis and decomposition techniques, the study investigated the role of two mechanisms that can explain the relationship between the interaction of different work-family life courses and the GPG.
The first mechanism relates to the segregation of women into work-family life courses that are 'rewarded' differently by pension systems: this is the case in contexts where the pension system requires a (high) minimum number of contribution years to access a pension and where women experience discontinuous trajectories or exit the labour market (work trajectory) after the birth of a child (family trajectory).
The second mechanism concerns the potential discrimination of one group with respect to the other, even when women and men have experienced similar family and work life courses. In other words, women and men receive significantly different 'rewards' despite having gained the same labour market experience over time and despite having made the same family choices.
The results show that the gender gap in pensions is largely explained by the first mechanism: 32% of the GPG in Italy and 27% of it in Germany is due to the gender segregation of work-family life courses. In particular, women are more likely to experience trajectories that combine many years spent performing caring duties due to the presence of children or elderly relatives and a consequent low attachment to the labour market, which in many cases prevents them from accessing a pension due to non-fulfilment of contribution requirements.
Compared to the 'segregation' effect, the 'discrimination' effect assumed by the second mechanism is less significant in explaining the GPG. Only – if we may say so – 5.8% of the gender pension gap in Italy and 4.2% of it in West Germany are explained by the fact that women and men, despite having experienced the same work-family life courses, receive different 'rewards', to the disadvantage of women. In both countries, for example, the interaction of a family trajectory characterised by being in a couple for a large part of one's adult life and having had a child and a full-time continuous work trajectory in the private sector is associated with a (yearly) pension gap of 478 euros in Italy and 518 euros in Germany.
More women at work or more men taking on caring tasks?
The results of this research suggest that reforming the pension system may be ineffective in narrowing the gender pension gap in Italy and Germany in the absence of policies that act on gender inequalities in work/family balance.
The measures put in place in the two countries to counter gender inequalities in pension benefits, indeed – such as in Italy adding up to 12 months of contributions to those actually paid by female workers based on the number of children – – are residual compared to the size of the GPG for those life courses characterized by long periods spent engaged in care work.
In other words, in order to act on the segregation and discrimination mechanisms that contribute to the GPG, it is necessary to work on several fronts: on the one hand, to break down the barriers that inhibit access to work-family life courses that are actually enhanced by the pension system (e.g. by increasing the availability of child care facilities ); on the other hand, to favour a more balanced distribution of care responsibilities between men and women, e.g. by instituting an equal and compulsory parental leave system.
