By Anna Veremchuk

The aim of this paper is to study the gender pension gap in Europe based on the newest EU-SILC data from the 2018 wave. The contribution of the paper is twofold. First, it provides evidence on factors shaping the gender pension gap in a large number of EU countries. Second, it analyses the relationship between the pension gap and:

(1) the coverage of occupational (second pillar) pensions and

(2) gender attitudes.

The main factor contributing to gender inequality in pension income is the number of years in employment. The influence of tertiary education is in the direction of increasing the gap, while the effect is the opposite when the hourly labor income gap is considered. The higher coverage of occupational pensions corresponds to a higher gender pension gap. This implies that the privatization of pension plans can lead to the conversion of a wage gap into a pension income gap and reinforces women’s disadvantage after retirement. In addition, a positive relationship is observed between unexplained portions of the pension income gap and the labor income gap. This could justify the hypothesis that unexplained portions are formed by the same factors persistent over time. One such factor could be gender norms; it has been found that countries with more gender equality support have lower unexplained portions of the labor income and pension gaps.

Source: SSRN