Gender pension gaps along the distribution: an application to the French case

Benoît Rapoport, Université Paris 1 Panthéon-Sorbonne
Dominique Meurs, Institut National d'Études Démographiques (INED) and Université de Paris Ouest Nanterre la Défense
Carole Bonnet, Institut National d'Études Démographiques (INED)

In this article we estimate the relative contributions of career duration and income earned to the pension gap between men and women at different points along the pension income distribution, as well as the role played by minimum pensions and other partly or wholly non-contributory policies in reducing this gap. Our research focuses on all the retirees in France in 2008, whether they were formerly employed in the public or the private sector. Applying the decomposition method proposed by Firpo, Fortin and Lemieux (2007, 2009), we show that in the first deciles, the gap is largely due to differences in career duration. This effect gradually fades, and differences in the reference wage become the main explanation. We also show that minimum contributory pensions play an extremely important role in limiting the gender pension gap in the first deciles, for both the public and the private sectors. Lastly, the gender pension gap is much smaller in the public sector than in the private. This is both due to the fact that careers in the public sector are less fragmented and also because calculation of the reference wage does not penalize career interruptions so much. This relative advantage of women employed in the public sector over their counterparts in the private sector can probably be added to the factors usually proposed to explain the over-representation of women in the public sector.