Pension Wealth and the Gender Wealth Gap

56 Pages Posted: 22 Sep 2022 Last revised: 27 Jan 2023

See all articles by Karla Cordova

Karla Cordova

Claremont Colleges - Pomona College

Markus Grabka

German Institute for Economic Research (DIW Berlin)

Eva Sierminska

LISER; DIW Berlin - German Socio-Economic Panel Study (SOEP); IZA Institute of Labor Economics

Abstract

We examine the gender wealth gap with a focus on pension wealth and statutory pension rights. By taking into account employment characteristics of women and men, we are able to identify the extent to which the redistributive effect of pension rights reduces the gender wealth gap. The data for our analysis come from the German Socio-Economic Panel (SOEP), one of the few surveys collecting information on wealth and pension entitlements at the individual level. Pension wealth data are available in the SOEP for 2012 only. While the relative raw gender wealth gap is about 35% (or 31,000 euros) when analysing the standard measure of net worth, it shrinks to 28% when pension wealth is added. This reduction is due to redistributive elements such as caregiver credits provided through the statutory pension scheme. Results of a recentered influence functions (RIF) decomposition show that pension wealth reduces the gap substantially in the lower half of the distribution. At the 90th percentile, the gender wealth gap in net worth and in augmented wealth remains more stable at roughly 27-30%.

Keywords: Germany, pension entitlements, gender wealth gap, redistribution, SOEP

JEL Classification: H55, D31, J16

Suggested Citation

Cordova, Karla and Grabka, Markus and Sierminska, Eva, Pension Wealth and the Gender Wealth Gap. IZA Discussion Paper No. 15563, Available at SSRN: https://ssrn.com/abstract=4226370 or http://dx.doi.org/10.2139/ssrn.4226370

Karla Cordova (Contact Author)

Claremont Colleges - Pomona College

Claremont, CA 91711
United States

Markus Grabka

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstrasse 58
SOEP
D-10117 Berlin
Germany
+49-30-89789-339 (Phone)
+49-30-89789-109 (Fax)

Eva Sierminska

LISER ( email )

3, avenue de la Fonte
Esch-sur-Alzette, L-4364
Luxembourg

HOME PAGE: http://www.sierminska.eu

DIW Berlin - German Socio-Economic Panel Study (SOEP)

Mohrenstra├če 58
Berlin, 10117
Germany

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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