Women retire later than men due to not contributing enough in their youth
Women retire later than men, according to a study published today by the UAB Centre for Demographic Studies, which analyses figures of labour market exits from the past decade in Spain. More men (55.5%) than women (45.5%) leave the labour market prematurely, which would be caused by many women not contributing enough during their youth and having to prolong their employment years to receive full retirement benefits.
The study concludes that a policy of raising the retirement age for all equally would continue to perpetuate existing inequalities.
Spain has chosen to delay the retirement age in response to the growth in life expectancy and the sustainability of the social security system. Therefore, the retirement age is gradually increasing from 65 to 67 by 2027 and the minimum number of years of contribution increases from 35 to 38.
The study Working More Years In Spain Has to Start from a Young Age: Lessons from the Labour Market Exit of People Aged from 50 to 65 in the Last Decade published today by the Centre for Demographic Studies (CED) at the Universitat Autònoma de Barcelona (UAB) in the journal Perspectives Demogràfiques, points to the fact that women work until an older age than men, that people working in routine occupations tend to leave the labour market eralier, and that 52.5% of those exiting the labour market are under 65.
The study analysed the premature exit of people aged 50 to 65 over the years 2010 to 2020 by using data from the Continuous Sample of Working Lives (CSWL) database, taken from Spanish Social Security records (persons born from 1945 to 1954), to discover who is having difficulties in reaching the current retirement age and why.
Only 13% of people remain in the labour market after reaching 65, and this is due to the fact that they worked less during their 50s. A total of 52.5% leave the labour market before reaching 65, and 10.1% partially retire when aged 61 to 65 years.
Differences between men and women and working categories
By gender, differences are observed since more men (55.5%) than women (45.5%) leave the labour market prematurely. According to the study, the results suggest that women work later because they remain less in the labour market at a younger age, so that working later would ensure the number of years of contributions necessary for a fully-fledged retirement.
By occupational category, the study finds that 60% of men in lower (routine) occupations retire much earlier than those in higher (professional) occupations (48%). For women, the gap between occupational categories is 12 percentage points (51% versus 39%).
Thus, it is observed that more workers in the routine classes leave the labour market earlier than workers in the intermediate and professional classes.
More men than women opt for partial retirement, i.e. they work part-time in the years leading up to full retirement, but also receive a portion of their retirement pension.
Why do people exit the labour market prematurely?
A total of 51% of early exits are through contributory retirement, 26% through incapacity for work, 17% leave the labour market without a contributory benefit, and 5% die before reaching the statutory retirement age.
The causes of exit are also related to the average age of exit and consequently the number of lost years of working life, i.e. lost years of contributions. The average age of exit due to incapacity for work is 57 years, for other reasons 58 years for men and 59 years for women, and due to retirement is around 62 years. The average age of those who die before reaching 65 is around 59.
The employment tenure in the fifties is much more stable for men than for women, and no relationship with premature retirement age was found for men.
Women's tenure in their fifties is more heterogeneous, with an average number of years worked between 5 and 9. In their experience, there is a relationship between the number of years worked in their fifties and the age of exit from the labour market. For women, an earlier exit is related to fewer years worked, and as women leave later, the percentage worked is higher up to the age of 64.
Delaying age of retirement does not seem to be a good solution
The UAB's CED study points out that delaying the retirement age equally may perpetuate existing inequalities by socio-economic level. "Before imposing a universal policy for all, it is important to know at what age people retire and for what reason", says the researcher who carried out the study, María Andrée López Gómez.
The author of the study suggests that the quality of work at younger ages and even during the fifties may be more effective in increasing contributions to the social security system than the number of years worked after the age of 60.
PERSPECTIVES DEMOGRÀFIQUES - Working More Years In Spain Has to Start from a Young Age: Lessons from the Labour Market Exit of People Aged from 50 to 65 in the Last Decade. María Andrée López Gómez. October 2023. Centre d'Estudis Demogràfics. Universitat Autònoma de Barcelona (CED-UAB): (https://ced.cat/PD/PerspectivesDemografiques_033_ENG.pdf).