Gender Dimensions of Pension Reform in the Former Soviet Union

Abstract

Under pension reforms in the former Soviet Union, unisex annuities benefit women more than men because of a major redistribution toward women. But they also penalize women more for shifting toward unpaid household work and may cause increased poverty among lone elderly women - especially in Kazakhstan, which has a high service requirement for the minimum pension and provides no compensation for time out to have children.

Castel and Fox analyze the gender implications of pension reform in Kazakhstan, the Kyrgyz Republic, Latvia, and Moldova. The new systems deliberately penalize early retirement and reward longer careers, so that with no change in behavior or policy, women's pensions will be lower than men's on average.

Still, the implicit financial returns for women remain higher on average than returns for men, because of women's longer life expectancy and because of redistributory minimum pensions. Overall, however, the net change in wealth resulting from the reforms will be larger on average for men than for women, because they will work longer and get a larger pension. Women's longer life expectancy means that women can expect to spend the last years of their lives alone. If their pensions are too low because of their work histories, poverty among elderly women may increase.

This paper - a joint product of the Gender Board; the Social Protection Team, Human Development Network; and the Poverty Reduction and Economic Management Sector Unit, Europe and Central Asia Region - is part of a larger effort in the Bank to understand how the reforms and new institutions being put in place in Eastern European and Central Asian countries affect women's lives and opportunities.