The gender impact of pension reform

Estelle James, Alejandra Cox Edwards, Rebeca Wong

Research output: Contribution to journalArticle

18 Citations (Scopus)

Abstract

Pension systems may have a different impact on the two genders because women are less likely than men to work in formal labor markets and earn lower wages when they do. Recent multi-pillar pension reforms tighten the link between payroll contributions and benefits, leading critics to argue that they will hurt women. In contrast, supporters of these reforms argue that women will be helped by the removal of distortions pillar and the better targeted redistributions in the new systems. This paper examines the differential impact of the new and old systems in three Latin American countries – Chile, Argentina and Mexico. Based on household survey data, we simulate the wage and employment histories of representative men and women, the pensions that these are likely to generate under the new and old rules, and the relative gains or losses of the two genders due to the reform. We find that women do indeed accumulate private annuities that are only 30–40% those of men in the new systems. However, this effect is mitigated by sharp targeting of the new public pillars toward low earners, many of whom are women, and by restrictions on payouts from the private pillars, particularly joint annuity requirements. As a result, low-earning married women are the biggest gainers from the pension reform.

Original languageEnglish (US)
Pages (from-to)181-219
Number of pages39
JournalJournal of Pension Economics and Finance
Volume2
Issue number2
DOIs
StatePublished - Jan 1 2003
Externally publishedYes

Fingerprint

Pension reform
Annuities
Wages
Household survey
Labour market
Mexico
Pensions
Pension system
Survey data
Targeting
Latin American countries
Redistribution
Chile
Argentina

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management

Cite this

The gender impact of pension reform. / James, Estelle; Edwards, Alejandra Cox; Wong, Rebeca.

In: Journal of Pension Economics and Finance, Vol. 2, No. 2, 01.01.2003, p. 181-219.

Research output: Contribution to journalArticle

James, Estelle ; Edwards, Alejandra Cox ; Wong, Rebeca. / The gender impact of pension reform. In: Journal of Pension Economics and Finance. 2003 ; Vol. 2, No. 2. pp. 181-219.
@article{38262ae6146f47439901d3af388c4d97,
title = "The gender impact of pension reform",
abstract = "Pension systems may have a different impact on the two genders because women are less likely than men to work in formal labor markets and earn lower wages when they do. Recent multi-pillar pension reforms tighten the link between payroll contributions and benefits, leading critics to argue that they will hurt women. In contrast, supporters of these reforms argue that women will be helped by the removal of distortions pillar and the better targeted redistributions in the new systems. This paper examines the differential impact of the new and old systems in three Latin American countries – Chile, Argentina and Mexico. Based on household survey data, we simulate the wage and employment histories of representative men and women, the pensions that these are likely to generate under the new and old rules, and the relative gains or losses of the two genders due to the reform. We find that women do indeed accumulate private annuities that are only 30–40{\%} those of men in the new systems. However, this effect is mitigated by sharp targeting of the new public pillars toward low earners, many of whom are women, and by restrictions on payouts from the private pillars, particularly joint annuity requirements. As a result, low-earning married women are the biggest gainers from the pension reform.",
author = "Estelle James and Edwards, {Alejandra Cox} and Rebeca Wong",
year = "2003",
month = "1",
day = "1",
doi = "10.1017/S1474747203001215",
language = "English (US)",
volume = "2",
pages = "181--219",
journal = "Journal of Pension Economics and Finance",
issn = "1474-7472",
publisher = "Cambridge University Press",
number = "2",

}

TY - JOUR

T1 - The gender impact of pension reform

AU - James, Estelle

AU - Edwards, Alejandra Cox

AU - Wong, Rebeca

PY - 2003/1/1

Y1 - 2003/1/1

N2 - Pension systems may have a different impact on the two genders because women are less likely than men to work in formal labor markets and earn lower wages when they do. Recent multi-pillar pension reforms tighten the link between payroll contributions and benefits, leading critics to argue that they will hurt women. In contrast, supporters of these reforms argue that women will be helped by the removal of distortions pillar and the better targeted redistributions in the new systems. This paper examines the differential impact of the new and old systems in three Latin American countries – Chile, Argentina and Mexico. Based on household survey data, we simulate the wage and employment histories of representative men and women, the pensions that these are likely to generate under the new and old rules, and the relative gains or losses of the two genders due to the reform. We find that women do indeed accumulate private annuities that are only 30–40% those of men in the new systems. However, this effect is mitigated by sharp targeting of the new public pillars toward low earners, many of whom are women, and by restrictions on payouts from the private pillars, particularly joint annuity requirements. As a result, low-earning married women are the biggest gainers from the pension reform.

AB - Pension systems may have a different impact on the two genders because women are less likely than men to work in formal labor markets and earn lower wages when they do. Recent multi-pillar pension reforms tighten the link between payroll contributions and benefits, leading critics to argue that they will hurt women. In contrast, supporters of these reforms argue that women will be helped by the removal of distortions pillar and the better targeted redistributions in the new systems. This paper examines the differential impact of the new and old systems in three Latin American countries – Chile, Argentina and Mexico. Based on household survey data, we simulate the wage and employment histories of representative men and women, the pensions that these are likely to generate under the new and old rules, and the relative gains or losses of the two genders due to the reform. We find that women do indeed accumulate private annuities that are only 30–40% those of men in the new systems. However, this effect is mitigated by sharp targeting of the new public pillars toward low earners, many of whom are women, and by restrictions on payouts from the private pillars, particularly joint annuity requirements. As a result, low-earning married women are the biggest gainers from the pension reform.

UR - http://www.scopus.com/inward/record.url?scp=84994778205&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84994778205&partnerID=8YFLogxK

U2 - 10.1017/S1474747203001215

DO - 10.1017/S1474747203001215

M3 - Article

VL - 2

SP - 181

EP - 219

JO - Journal of Pension Economics and Finance

JF - Journal of Pension Economics and Finance

SN - 1474-7472

IS - 2

ER -