The Motherhood Pension Gap in a Defined Contribution Pension Scheme—the Case of Poland

Anna Jędrzychowska, Ilona Kwiecień and Ewa Poprawska
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Anna Jędrzychowska: Department of Insurance, Wrocław University of Economics and Business, 53-345 Wrocław, Poland
Ilona Kwiecień: Department of Insurance, Wrocław University of Economics and Business, 53-345 Wrocław, Poland
Ewa Poprawska: Department of Insurance, Wrocław University of Economics and Business, 53-345 Wrocław, Poland

Sustainability, 2020, vol. 12, issue 11, 1-18

Abstract: A gender gap in pensions has recently been discussed in the context of non-discrimination and the sustainability of pension systems. Such systems in Europe are evolving towards strengthening the role of individual contributions from periods of paid work. Among other factors, the women’s pension gap is affected by interruptions in employment arising from care responsibilities. The purpose of this article is to measure the pension gap associated with having children in defined contribution pension systems. Using financial mathematics, the retirement capital of a childless woman (without breaks in work) was determined and compared with mothers of 1–4 children. The results indicate that the motherhood pension gap is approximately 4.5%–9.5%, 7.5%–15%, 9%–20%, and 12.5%–25% for mothers of 1, 2, 3, and 4 children, respectively. Measuring these individual gaps allows the cost of investing in children to be estimated. Significant for systemic and individual decisions is that the gap size is highest by the first and the second child, however the decision about the third child—relevant to the demography as ensuring the generational replacement—means the whole pension gap could rise to 20%. This could help support a policy of counteracting adverse demographic trends in fertility rates through the building of socially sustainable pensions schemes. In terms of future research, it forms the basis for building a gap measurement model that takes into account various drivers of the gender gap.

Keywords: cost of maternity; pensions sustainability; gender pension gap; personal finance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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