Australia to investigate gender pensions gap
The Australian parliament has launched an inquiry into the country’s “retirement income gap”, after a study found that on average women leave work with half as much in their pension funds as men.
A Senate committee will investigate the effect women’s caring responsibilities have on their lower retirement income, and whether reforms to legislation on pensions, social security, and parental leave are needed.
Last month, the Australian bank ANZ published a report showing that 37% of women have no personal income at the age of retirement, and 90% of women will retire with inadequate savings to fund a comfortable lifestyle.
The inquiry was established following a motion from senators Jenny McAllister of the Labor party and Sean Edwards of the center-right Liberal party. Writing for the Sydney Morning Herald, Senator McAllister said that: “Part of the problem lies with the gender pay gap. Australia’s workforce participation rate for women was 70.5 per cent last year, and has been increasing steadily for years.”
She continued: “Our gender pay gap, however, has remained stagnant for almost two decades. As a result, women earn less than men over the course of their lifetimes. A lot less—$1.5 million, if you are comparing men and women with university degrees.”
Last year, it was reported that the gender pay gap in Australia had reached its highest point for 20 years, with women earning 18.2% less than men.
Lawrence Kahn has written about the gender pay gap for IZA World of Labor. Observing that pay systems that compress occupational wage differentials—such as the minimum wage—can reduce women’s incentives to enter male-dominated occupations, he argues that: “Policies to reduce occupational gender segregation and career interruptions by women may narrow the gender pay gap without the adverse employment effects of wage compression.”
Wage compression and the gender pay gap by Lawrence M. Kahn
Equal pay legislation and the gender wage gap by Solomon W. Polachek
Redesigning pension systems by Marek Góra
Pension reform and couples’ joint retirement decisions by Laura Hospido
Find more IZA World of Labor articles on gender here