Gender inequality in both pay and pensions

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Two statistical studies published in France in summer 2002 indicate that gender inequality is enduring and resistant to change. Gender pay inequality is still a reality and has even been exacerbated over the last 20 years (principally due to the growth in part-time work). Similarly, in terms of retirement pensions, parity has still not been achieved, with women’s pensions still clearly trailing men’s.

The publication of two surveys in summer 2002, one by the National Institute for Statistics and Economic Research (Institut National de la Statistique et des Etudes Economique, INSEE), the other from the Ministry of Social Affairs' Office for Research, Assessment and Statistics (lDirection de la Recherche, des Etudes, de l’évaluation et des statistiques du Ministère des affaires sociales, DREES) have provided an opportunity to re-evaluate the understanding of income-related gender inequality. The first study stresses the gender pay differences throughout people’s careers, while the second focuses on the discrepancies between men and women in terms of income through pensions after retirement.

Gender pay inequality

The first survey, entitled 'Differences in pay paths from the first job onwards' (Les différences de carrières salariales à partir du premier emploi, Sylvie Le Minez and Sébastien Roux, Economie et Statistique, INSEE, No. 351, 2002), assesses the employment situations and wages of people starting out in the labour market over the first few years of their careers, and analyses the developments in this area since the mid-1970s. The analysis of pay trajectories from a gender perspective shows that gender pay inequality, far from disappearing, is still a factor, and is even increasing from one generation to the next: the gap between men’s and women’s pay stands at around 22% for those entering the labour market for the first time in the early 1990s, whereas this difference was 15% for people in the same situation in the late 1970s (FR0109106F).

This increase in gender pay differentials for young labour-market entrants over a 20-year period is mainly attributable to the status of job occupied. Indeed, men and women do not occupy the same types of job (women being more frequently employed in part-time jobs and men in full-time ones). Moreover, regardless of generation, the pay discrepancy is greater for part-timers than for full-timers. Since young women are far more involved in the increasing levels of part-time work than are men (in the early 1990s, 35.2% of first jobs occupied by women were part-time, as opposed to 17.7% of men’s first jobs), the probability of them finding themselves in part-time work is consequently much higher than that for men, which thus compounds the overall gender pay gap.

These pay discrepancies are far from compensated for in the course of a career. The survey’s authors demonstrate that the gender pay gap grows by 5% after five years of work. Various factors principally account for this situation. First is women’s relatively lower participation rate in employment due to career interruptions. Second is the fact that women more frequently enter the labour market through the part-time 'door' and stay in that form of employment longer. Lastly, there are differences in career opportunities and in access to positions of responsibility.

Post-retirement gender inequality

The inequalities experienced by women throughout their careers have considerable 'snowball' effects on their pensions relative to those of men. Gender inequality on the labour market continues well beyond working life and affects female pensioners as well.

A study entitled 'Pension levels in 2001: a gross average of EUR 1,126 per month for those aged 60 and over', (Les montants des retraites perçues en 2001 : en moyenne 1126 EUR bruts par mois pour les 60 ans et plus), in Etudes et Résultats, DREES, July 2002) carried out by DREES, in the Ministry for Social Affairs, reveals that on average, women receive a pension worth EUR 848 per month, which is 42% lower than that of men (EUR 1,461). These findings, from a sample taken in 2001 from various retirement pension schemes, cover all the basic retirement and supplementary schemes.

The pioneering nature and significance of this survey should be stressed. France has a fragmented retirement pension system (with a number of schemes co-existing, such as those for the civil service, the crafts industry, agricultural labourers etc), and there is little data available on them. The utility of the sample used in this survey is that it has generated new knowledge on the incomes of retired people and enables comparisons to be made between them.

The three factors taken into account in the calculation of pensions - length of contribution period, pay level or non-wage income subject to pension contributions, and the particular pension scheme - depend greatly on an individual’s career and, as we have seen, the occupational paths of men and women differ greatly. Only 39% of retired women have been able to pay contributions over an unbroken career, while 85% of male retirees have done so. Moreover, the level of women’s pensions is distributed over a wider range than that of men’s because many women receive low levels of pension. Among retired women, 7% have paid contributions for less than 10 years, and 27% for 10-25 years, whereas the proportion of men having worked for fewer than 25 years is marginal. If only pensioners who have paid contributions over an unbroken career are compared, the survey shows that the distribution of pension levels among women is quite similar to that for men.

This study of retirement pensions by gender and age group finds that, despite everything, a degree of improvement in women’s pensions and therefore a reduction in gender inequality can be expected in future. Among female pensioners, there is a systematic link between age and pension level: the younger the pensioner (ie the more recently they retired), the higher the pension. This might be explained by the lengthening of women’s careers, and also by an improvement in women's qualifications (and therefore in salary level) and careers.

Moreover, if instead of looking only at personal retirement pensions, excluding survivor’s benefits, all the various pensions received are examined, the discrepancy between men and women is reduced. Women then receive an average of EUR 1,072 per month, ie 37% less than men (compared with 42% less for personal pensions). The gap gets smaller over time because women receive survivor’s benefits to an increasing degree as they get older. For women as a whole, such benefits account for an extra amount worth 24% of their personal retirement pension entitlements. This extra income ranges from 7% for women aged 60-64, to 55% for those aged 85 and over. However a gender gap still exists because of the differences in the careers of men and women.

This fresh information on gender inequality has become available at a time when Nicole Ameline, the junior minister for occupational parity and equality, is revealing the outlines of her policy for achieving occupational and wage-related gender equality, which focus on equality in training and access to the various jobs and professions. Her 25-point action plan, to be implemented over a five-year period, is to be the subject of a round-table discussion in autumn 2002.

Commentary

The two surveys published in summer 2002 complement each other well and bear out what was already assumed, ie that gender pay inequality is a constant factor throughout people’s working lives and all the way into retirement. (Christèle Meilland, IRES)