Women not only earn less money on average in their working lives than men, but they also receive less pension as a result. The difference between the sexes is huge – and greater in the West than in the East.
Women over 65 have to get by on significantly less money than men. According to preliminary figures, the Federal Statistical Office puts the so-called “Gender Pension Gap” for 2023 at 27.1 percent. Women received an average retirement income of 18,663 euros per year, while for men it was 25,599 euros, gross. This difference is even greater if survivors’ pensions, which 29 percent of women receive, are excluded. Then the difference is even 39.4 percent.
In the old federal states excluding Berlin, the gap is significantly higher at 31.5 percent (without survivors’ pensions 43.8 percent) than in the new federal states with 6.1 percent (without survivors’ pensions 18.6 percent). This is mainly because men in the East have significantly lower retirement income than in the West. One consequence of the gap is that women are significantly more likely to be at risk of poverty in old age. The rate is 20.8 percent, while only 15.9 percent of men over 65 are affected.
Various factors are responsible for women’s lower retirement income, for example:
The employment rate of women still lags behind that of men, although the situation is improving every year. In 2023, 73.6 percent of women and 80.8 percent of men worked. The difference is now only 7.2 percent. 20 years ago, only 58.8 percent of women were employed, 12.1 percent less than men. In 1991 the difference was 21.4 percent.
These large differences from the past still have an impact on pensions today. Today’s pensioners were of working age at a time when almost half of women did not work at all. Accordingly, they also acquired lower pension entitlements on average.
Almost half of employed women in Germany work part-time. In 2023, their share rose to 48 percent, which is the third highest value in the EU after the Netherlands and Austria. For mothers, the proportion even rises to 66 percent. Those who work part-time have lower salaries on average than full-time workers and therefore pay fewer pension insurance contributions and acquire fewer entitlements. More part-time work is therefore a sure indicator of a lower pension.
Economists and politicians have already identified this as a problem and are working on solutions – also because increased (full-time) employment among women could be a good remedy against the growing labor shortage in the country. The most important instrument for more full-time jobs for women is expanding childcare.
Women not only work less often and less, but also more often in lower-paying jobs. According to the Federal Employment Agency, women make up 77 percent of employees in health and social services, 72 percent in schools, kindergartens and other educational institutions, and around 66 percent in other services, including hairdressers and beauty salons. However, they are underrepresented in well-paid professions such as MINT fields. MINT stands for mathematics, computer science, natural sciences and technology. Here the proportion of women is a meager 17 percent. All of these numbers have hardly changed in recent years.
The choice of career leads to a difference in hourly wages, which, according to the Federal Statistical Office, was recently around 18 percent. It has been slowly decreasing for years. In 2014 it was around 22 percent. Nevertheless, it still means that women pay less into the pension fund and therefore get less out of it later.
Not everything about the gender gap can be explained by lower employment, more part-time work and the choice of lower-paying professions. The Federal Statistical Office puts the adjusted gender pay gap for last year at 6 percent. This means that women earn six percent less money, which cannot be explained by objective factors such as those above. For this adjusted gap, men and women of similar age, with the same jobs, qualifications and biographies were compared. The statisticians assume that part of this could be explained by interruptions in employment due to pregnancy or more frequent care of relatives by women than by men. However, some wage discrimination will still remain. This in turn also leads to lower pension payments and therefore to lower pensions.
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