Category Archives: Gender inequalities

Stung by Pension Reforms: The Impact of a Change in State Pension Age on Women and their Partners

In many developed countries, pension systems are being reformed by increasing the age eligibility to receive the state pension and by reducing its generosity.  The aim of these reforms has been to improve the financial sustainability of the system by encouraging people to work at older ages.

Up to now, the pension reforms in the UK have mostly affected women born in the 1950s, who have seen their pensionable age increase from 60 in 2010 to 65 in 2018 and 66 in 2020.  As the state pension age continues to increase, many more men and women will be affected in the future.

We compare women in the UK who are similar in terms of marital status, education, and many other factors, but who were born only a few months apart and therefore, due to the reform, have different state pension ages.  Our results suggest an overall negative impact of the reform, which mostly affects more vulnerable women.

Those women who are slightly younger and need to wait longer to reach their state pension age are more likely to be in employment and work longer hours than those who are slightly older and have already reached their state pension age.  Hence, the increase in the state pension age had the desired effect of keeping more women in employment.  However, we also find clear negative effects on mental health and on other aspects of wellbeing.

Crucially, the reform had a more negative impact on some groups of women than others.  For both women with and without a university degree the reform has led to a similar increase in the chances of being active in the labour market (either employed, self-employed or seeking work).  However, while those with a degree are more likely to be in employment, for those without a degree there is also an increase in unemployment.  It is women without a degree who experience a negative effect on mental health, are more likely to say they struggle financially, that they have problems paying bills, and have lower level of satisfaction with their income.  In contrast, among women with a university degree the effect is overall close to zero or possibly even positive.  This may be because women with a university degree are more likely to hold highly paying – and possibly more satisfying – jobs.

The reform also had a more negative effect on women without a partner.  We find a similar increase in employment among women with and without a partner, and that both experience a worsening in mental health and satisfaction with life, but these negative effects are much larger among women without a partner.  While all affected women are much more likely to say they struggle financially, have problems paying bills and have lower level of satisfaction with their income as a result of the change in the state pension age, the negative effect is much larger among women without a partner.  As women who are living with a partner can rely on additional income and support from their partner, the change in the state pension age has increased inequalities in wellbeing.

Our new results on the direct and indirect effects of the pension reforms in the UK are likely to be applicable also to other countries that are seeking to implement similar pension age reforms.  It is important that the positive fiscal impact of the increase in the state pension age is measured against the negative effects on wellbeing and the increase in inequality between those who can and those who cannot afford to retire at their preferred age.  Additional inequalities created based on level of education and on family structure should also be considered.

Della Giusta, M., Longhi S. (2021) Stung by Pension Reforms: The Unequal Impact of Changes in State Pension Age on UK Women and their Partners, Labour Economics72:102049.

Employment and Earning Differences in the Early Career of Ethnic Minority British Graduates

Ethnic minorities in the U.K. are more likely than the white majority to gain university qualifications, but experience worse labour market outcomes on average. This paper compares employment and earnings of British graduates from ethnic minorities to those of white British graduates to analyse whether ethnic labour market differences exist among the highly qualified, and whether they can be explained by differences in parental background, local area characteristics or differences in university careers. These factors account for a substantial part of persistent ethnic differences in earnings, but explain very little of the differences in employment. Compared to the literature estimating ethnic labour market inequalities on people with any level of qualification, we find smaller ethnic differences in employment and almost no differences in earnings among graduates entering the labour market. The results are robust to various changes in model specification.

Zwysen W., Longhi S. (2018) Employment and Earning Differences in the Early Career of Ethnic Minority British Graduates: the Importance of University Career, Parental Background and Area Characteristics, Journal of Ethnic and Migration Studies, 44(1) 154-172.

The Ethnicity Pay Gap

Research Report for the Equality and Human Rights Commission (EHRC):
Longhi, S. and Brynin, M. (2017) The Ethnicity Pay Gap, Equality and Human Rights Commission, Research Report 108.

Here you can listen to a talk and a related podcast on The Ethnicity Pay Gap organised by the Social Market Foundation and the Economic and Social Research Council (ESRC) within the Ask the Expert Series.  You can also read a short blog on the Ethnicity Pay Gap Reporting published on the ESRC website.