Gender wage and longevity gaps and the design of retirement systems

Francesca Barigozzi, Helmuth Cremer and Jean-Marie Lozachmeur

No 21-1217, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We study the design of pension benets for male and female workers. Women live longer than men but have a lower wage. Individuals can be single or live in couples who pool their incomes. Social welfare is utilitarian but an increasing concave transforma- tion of individualslifetime utilities introduces the concern for redistribution between individuals with di¤erent life-spans. We derive the optimal direction of redistribution and show how it is a¤ected by a gender neutrality rule. With singles only, a simple utilitarian solution implies re- distribution from males to females. When the transformation is su¢ ciently concave redistribution may or may not be reversed. With couples only, the ranking of gender retirement ages is always reversed when the transformation is su¢ ciently concave. Under gender neutrality pension schemes must be self-selecting. With singles only this implies distortions of retirement decision and restricts redistribution across genders. With couples, a rst best that implies a lower retirement age for females can be im- plemented by a gender-neutral system. Otherwise, gender neutrality implies equal re- tirement ages and restricts the possibility to compensate the shorter-lived individuals. Calibrated simulations show that when singles and couples coexist, gender neutrality substantially limits redistribution in favor of single women and fully prevents redistri- bution in favor of male spouses.

Keywords: Gender wage gap; gender gap in longevity; retirement systems (search for similar items in EconPapers)
JEL-codes: H21 H31 H55 (search for similar items in EconPapers)
Date: 2021-04, Revised 2023-02
New Economics Papers: this item is included in nep-age, nep-dem and nep-gen
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Related works:
Journal Article: Gender wage and longevity gaps and the design of retirement systems (2023)
Working Paper: Gender wage and longevity gaps and the design of retirement systems (2023)
Working Paper: Gender wage and longevity gaps and the design of retirement systems (2023)
Working Paper: Gender Wage and Longevity Gaps and the Design of Retirement Systems (2021)
Working Paper: Gender wage and longevity gaps and the design of retirement systems (2021)
Working Paper: Gender Wage and Longevity Gaps and the Design of Retirement Systems (2021)
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