Invisible Scars or Open Wounds? The Role of Mid-career Income for the Gender Pension Gap in Sweden

Abstract

This study investigates the importance of mid-career income for the gender pension gap and psychological scarring effects of low income earlier in life. More specifically we analyse whether women's typically less stable mid-life careers also affect outcomes in late careers and in retirement. Swedish income register data from 1990, 2009, and 2015 was linked to the "HEalth, Ageing, and Retirement Transitions in Sweden" survey. The gender pension gap of 966 retirees and worries about pension income of 2,723 older workers between the age of 60 and 66 years were investigated. Blinder-Oaxaca decompositions were applied to analyse the gender pension gap and linear regressions were used for the analysis of financial worries. Results show that gender differences in mid-career income play a stronger role for the gender pension gap than late career income. Mid-career income is furthermore related to higher worries about pension income and accounts for observed gender differences. Our findings demonstrate that gender gaps in mid-career income can be regarded as an open wound with visible negative effects in older ages. The reformed pension system in Sweden may potentially contribute to an even greater gender gap in pensions.

Life-course-sensitive analysis of group inequalities: Combining Sequence Analysis with the Kitagawa-Oaxaca-Blinder decomposition

“…The most common approach in the literature decomposes the GPG along a set of individuallevel characteristics, such as retrospective information on labour market attachment operationalised as the sum of years individuals have spent in a certain state over their life course (Bardasi and Jenkins 2010;Bettio, Tinios, and Betti 2013;Bonnet, Meurs, and Rapoport 2020;Cordova, Grabka, and Sierminska 2022;Even and Macpherson 2004;Ezeyi and Vujic 2017;Hänisch and Klos 2014;König, Johansson, and Bolin 2019;Levine, Mitchell, and Phillips 1999;Nolan et al 2019;Veremchuk 2020;Zhao and Zhao 2018). Table A1 in the Appendix provides an overview of decomposition analyses of GPGs.…”

When we were young: how labour market attachment during mid-life affects labour market exit

“…Labour market attachment, in the form of employment/unemployment trajectories can affect individuals' transition out of the labour market. The literature shows that labour market attachment throughout the life course affects the late working life outcomes of individuals such as lower earnings of older workers with career breaks and job losses (König et al ., 2019; Heisig and Radl, 2017). When it comes to the link between labour market attachment history and the timing of the exit, the direction of the association is rather mixed as exit is not only through pension receipt but also through various alternative pathways such as unemployment, disability or illness (Thern et al ., 2022; Öylü et al.…”