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Closing the Maternity Pension Gap? Impact of Maternal Pension Supplements
XXIII Concurso Nacional para la Adjudicación de Ayudas a la Investigación en Ciencias Sociales
Economía Aplicada
Investigador Principal: Cristina Bellés Obrero
Sinopsis
The goal of this project is to assess the effectiveness of pension supplements in reducing the gender pension gap, with a particular focus on mothers. Women are at a higher risk of old‐ age poverty due to lower pension incomes, which are often a result of reduced labor force participation linked to motherhood. In the European Union, the gender pension gap averages 29%, while in Spain it reaches 31.3%, significantly surpassing the wage gap.
To address this issue, Spain introduced a pension supplement in 2016 for women with two or more children. The supplement increases with the number of children: 5% for two children, 10% for three, and 15% for four or more. The aim is to compensate mothers for the career breaks and slowdowns experienced while raising children, which reduce their lifetime contributions to pension schemes and, ultimately, their retirement benefits.
We aim to evaluate the impact of this reform using a differences‐in‐differences methodology. We will compare the pension outcomes of women with two or more children to those with fewer children, or to men with similar family sizes, before and after the 2016 reform. The study will address three key questions: how the reform affects women’s pension income, whether it effectively reduces the motherhood pension gap, and how it influences retirement decisions. Additionally, we will explore the reform's potential impact on family dynamics, such as divorce rates, as the financial independence provided by the pension supplement might affect marital stability.
In 2019, the European Court of Justice ruled that the pension supplement unfairly discriminated against fathers, prompting a new reform in 2021. The updated policy allows both mothers and fathers to claim the supplement under specific conditions, potentially reversing some of the benefits for women observed after 2016. Our study will also investigate the effects of this 2021 reform and whether it altered the previous outcomes.
Ultimately, this project aims to make a significant contribution to the literature on gender inequality in pensions, offering valuable insights for future policy designs aimed at closing pension gaps.
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