Breadwinners, carers and gender inequality: implications for pension policy in the UK Debora Price Centre for Research on Ageing and Gender University of Surrey ESRC-funded

Pensions are Big News Pension scandals Demographic transition Privatisation of UK pensions The pensions crisis The Turner Commission Widespread recognition that women do not accrue sufficient pension income

Gender Inequality in Pensions A substantial majority of the elderly poor in the UK are women 73% of guarantee credit recipients over 65 are women (approx 1.5 million women); A further quarter to a third entitled do not claim, disproportionately women Almost 1.3 million older women live below a poverty line set at 60 per cent of median income, compared with about 800,000 older men Womens median income in retirement is only 58% of mens; gender inequality in pension provision grew markedly from the mid-1980s to 1998, but has recovered a little in recent years

The Policy Response Govt. reports now tend to have a chapter on women and pensions Underlying policy assumption that improvements in the labour force participation of women will naturally lead to convergence in the pensions of men and women

The Social and Cultural Dimension to Pensions Changes in labour markets Flexible working Part-time working Women in the labour market, but in which sectors, working for how long, and earning how much? Changes in family formation Later child-birth, later partnering Increasing risk of partnership breakdown Increasing risk of serial partnerships Increasing risk of living alone Separation of motherhood from marriage ? Changes in gender roles and identities

Inside the Household Still very wide disparities in mens roles (primary breadwinner) and womens roles (child care, housework, smooth running of household, supplementary earnings) Flexible working primarily aimed at women who need to manage unpaid and paid work Inequality inside the home and in the labour market are inextricably linked Pension provision is linked to labour market participation, but is it also linked to provider role?

Questions To what extent do complex marital and cohabitation histories influence no/low earnings & pension provision? How does current partnership status influence no/low earnings & pension provision? What impact does maternal history have on earnings & pension provision, and how does maternal history interact with partnership status and partnership history for these purposes? How does earnings inequality within the household influence pension provision?

Data Requirements Need a dataset that Has large numbers. Need to control for a large number of demographic and personal factors. Collects partners data. Collects maternal and partnership histories Collects detailed information about pensions and pension scheme participation

Possible Resources BHPS – but problems with pension questions in first couple of years; small numbers; attrition, particularly of divorced men FRS – large numbers but no marital and maternal histories LFS – large numbers but no marital and maternal histories, no pension info GHS – not perfect (no marital/partnership/ maternal histories from those over 60; no paternal histories at all); but pretty good all round and by far the best data source for tackling these questions ELSA – possible future resource, but only those over 50

GHS Data Combined two years: 2000/1 and 2001/2 Aged 20 to 59: women: n=11,087; men: n=10,314 Aged 65+: women: n=3,543, men n=2,829 Partnered, aged 20 – 59: women, n= 6,141; men: n= 5,772 (Variables created at partnership level and each partnership selected only once)

Data Presented Today What difference does maternal history make to earnings and pension provision? How equal are partners in terms of their earnings? What drives inequality within partnerships? How does inequality between partners of itself impact on pension accumulation?

Source: General Household Survey 2000/1 and 2001/2, mothers whose dependent children live elsewhere, and those looking after others children have been excluded; authors analysis

Degree of Earnings Inequality within Couples: Women aged 20 to 59

Breadwinners and Dependants At almost any age between 25 and 59, almost two thirds of women are either not earning, or earning less than £13,000 a year* (70% of women in their late 30s) Only 11% of men contribute less than 40% to joint earnings (63% of women) Over a third of men contribute more than 80% to joint earnings (9% of women) Male breadwinners are high earners Women who contribute equally to partnerships or are the main breadwinners are not high flyers – they tend to be low earners, and their partners are low earners or not in paid work * 2001/2 value

Are dependent women less likely to make pension provision, all other things being equal? Multivariate logistic regression Holding age, personal earnings and joint earnings constant, the degree of earnings inequality in a relationship has a significant impact on whether women contribute to pensions For women earning 0-20% of joint earnings, odds of contributing to a pension are only a third of the odds for equal earners, and for those earnings 20% - 40%, only 0.8. All other things being equal, the odds of a female breadwinner making pension provision are 1.6 times the odds of an equal earner. Controlling for maternal status and educational qualifications makes no material difference.

But…all is not equal Female breadwinners most likely to be in lowest earnings quintiles (53%); with low or non- earning partners (69%); and half are over 50. Male breadwinners likely to be highest earners (46% in top quintile) Men whose partners supplement family income a little (20% - 40%) are best off in pension terms Breadwinning is normatively associated with pension provision for men and women, but women cant overcome massive financial constraints

Policy implications Either change gender relations, or Re-distribute pension income to carers and those on low incomes No political commitment or public consensus to interfere in the balance of gender relations Increasing trend to privatisation of pensions – association of pensions with paid work and high earnings – must be reversed if poverty of women in retirement is to be addressed.