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Improving women’s old-age protection – the potential of closing labour market gaps

The EPSR Action Plan sets the ambitious target to “at least halve the gender employment gap compared to 2019” by 2030.

This study discusses the potential impact that achieving such goal would have on the gender pension gap.

Principle #2 and principle #15 of the EPSR are in fact very much linked, and labour market represents the playground for such bond.

In principle, tackling the gender-specific gap derived from working life results as much more effective in ensuring adequacy and also fiscal sustainability of women’s pensions than closing the pension gap via interventions on pension benefit compensation.

However, the gender employment gap has already negatively impacted social protection entitlements for many women for the decades to come. At the state, the gender pension gap cannot be closed without adding elements to pension systems.

While it is crucial to improve women’s position in the labour market (through a fairer distribution of care work and paid employment; free and adequate childcare infrastructures; more and better quality jobs for women; ending the undervaluation of work done by women through enforcing equal pay for work of equal value; reduction of precarious work; erasing pay gap), at the same time, pensions must be supplemented with elements addressing current gender-specific labour market discriminations. Pension systems must be gender-sensitive and provide for

  • an appropriate minimum level of wage replacement rate
  • more generous minimum income schemes for women in old age
  • decent and effective provisions for surviving dependants covering also non-married couples

Dignifying and equality-triggering systems should also ensure

  • adequate tax-funded compensation for periods of low wage
  • compensations for career breaks or other employment restrictions due to child- and elderly care