Gender and the impact on retirement

The increased awareness of the gender pay gap over recent years is an important step in being able to close it. Time taken off to care for and raise children and care for older relatives is one of the largest impacts on pay. While it is clear to see the implications of the pay gap during our working years, we often forget how this impacts retirement.

Unpaid Work

Women typically spend disproportionately more time on unpaid care work than men throughout their lives. Unpaid care work is seen primarily as a female responsibility. Across all regions of the world, women spend on average between three and six hours on unpaid care activities, while men spend between half an hour and two hours. When Statistics New Zealand undertook an analysis of unpaid work, they found it was worth around $40 billion to the economy each year; women accounted for 64% of this worth ($25 billion).

However, as we get older the time spent on unpaid activity falls quite markedly and there is little difference in the participation of men and women. Helping non-household members is the most common form of unpaid work outside the home for both men and women in New Zealand. Women still spend twice as much time caring for people outside their household than men. Men undertake unpaid work mostly after retirement and do it outside of the home (i.e. not caring for family members), so they sacrifice less economically.

The unequal distribution of unpaid work over the life of women is a result of social pressures for women to meet domestic and reproductive roles. Women are also expected to participate in paid activities which results in a “double burden” for them. The bulk of women’s unpaid work involves caring for children and other family members and they do it during their working years (ages 25-45). The struggle for women to reconcile care responsibilities with paid employment can lead to “occupational downgrading”, where women choose employment below their skills level and accept poorer conditions

Why is this an issue?

As a result of this, generally speaking, at the age of retirement women have less income from savings, investment or retirement schemes than men. One study of household wealth and savings in New Zealand shows that overall average net worth for women is about 86% of that of men. This ratio differs, however, by age, ethnicity, education, home ownership and family status.

Added to this is the fact that women live longer than men, so that whatever savings or investments they have need to be stretched over a longer period of time. This takes a toll on the quality of life for some women as they simply cannot afford to care for themselves.

What can be done?

This issue is one that won’t be solved overnight that’s for sure! It is going to take some big societal changes and a big overhaul in how we think and value the work women do. However there are two countries I would like to highlight that have implemented impressive legislation to close their pay gap.

The first is Sweden. Sweden’s maternity-leave and paternity-leave policies are some of the most generous in the developed world. Couples are required to split their parental leave and it has become frowned upon for fathers not to take their share of leave. This means that employers expect both mothers and fathers to take an equal amount of time off to raise children so taking a ‘break’ from work does not have as big of an impact than in other countries.

The other country is Rwanda.  After the 1994 Rwandan genocide ended, 70 percent of the country was female, leaving the job of rebuilding the country’s now-destroyed social, economic, and political institutions in the hands of women—a complete shift, especially for the previously traditional patriarchal society. Given the role of women in the country’s reconstruction period, the Rwandan government established gender equality as a legal framework with the 2003 adoption of Article 9 in the Rwandan Constitution, which guarantees equal gender rights and requires women to be granted “at least thirty percent (30%) of posts in decision-making organs.”

A legal guarantee of equal rights ensured that the government allocates resources to ensure that gender promotion is not just in theory but also in practice. Women and men in Rwanda have equal rights on all matters,” said Olive Uwamariya, Rwandan gender activist with Care International. Following the adoption of Article 9, Rwanda became the first country in the world with a female majority parliament in 2008, expanding the lead to 64 percent during the 2013 elections.

New Zealanders need to come up with new ideas on how we can support women who do choose to leave the workforce to raise a family or care for a loved one so that it does not negatively impact them economically for the rest of their lives.

About Eve Williams

Eve Williams is the Content Developer and Social Media Administration for Eldernet. She is currently studying towards her Masters at the University of Canterbury. She has a passion for learning new things.