The impact of taking up care tasks on pensions: Results of typical-case simulations for several European countries1
Published date | 01 March 2024 |
DOI | http://doi.org/10.1177/13882627231221045 |
Author | Karel van den Bosch,Tanja Kirn,Nataša Kump,Philippe Liégeois,Amílcar Moreira,Nada Stropnik,Mikkel Barslund,Vincent Vergnat,Gijs Dekkers |
Date | 01 March 2024 |
The impact of taking up care
tasks on pensions: Results of
typical-case simulations for
several European countries
1
Karel van den Bosch
Federal Planning Bureau, Belgium; Herman Deleeck Centre for Social Policy, Antwerp University, Belgium
Tanja Kirn
University of Liechtenstein, Liechtenstein; University of Freiburg, Germany
Nataša Kump
Institute for Economic Research, Slovenia
Philippe Liégeois
LISER, Luxembourg
Amílcar Moreira
University of Lisbon, Portugal
Nada Stropnik
Institute for Economic Research, Slovenia
Mikkel Barslund
HIVA –Research Institute for Work and Society, KU Leuven, Belgium
Vincent Vergnat
LISER, Luxembourg; University of Luxembourg, Luxembourg
Gijs Dekkers
Federal Planning Bureau, Belgium; Centre for Sociological Research (CeSO), KU Leuven, Belgium
1. This paper is a result of the MIGAPE project (DG JUST; Grant Agreement 820798), co-funded by the Rights, Equality
and Citizenship Programme of the European Union (2014–2020).
Corresponding author:
Tanja Kirn, University of Liechtenstein, Fürst-Franz-Josef-Strasse, 9490 Vaduz, Liechtenstein; University of Freiburg,
Freiburg, Germany.
Email: tanja.kirn@uni.li
Article
European Journal of Social Security
2024, Vol. 26(1) 44–63
© The Author(s) 2023
Article reuse guidelines:
sagepub.com/journals-permissions
DOI: 10.1177/13882627231221045
journals.sagepub.com/home/ejs
Abstract
Informal care is often accompanied by a reduction or abandonment of professional activity by the
caregiver. Therefore, caregiving may be associated with a lower pension for the former caregiver
than for people without care obligations. There is a large gender difference in informal care
responsibilities, and this may contribute to the gender pension gap. As the impact of care-related
labour market decisions depends on the design of the pension system, we carry out a cross-coun-
try comparison, in which we analyse the impact of care obligations in countries with high
(Luxembourg), middle (Liechtenstein, Belgium, Portugal) and low (Slovenia) gender pension
gaps. Using typical-case simulation models, we examine how the impact of care-related events
is mediated by pension rules, given women’s labour market decisions. To what extent does work-
ing part time or interrupting one’s career at the age of 30 or 54 reduce the later pension benefit?
How are these losses mitigated by pension credits that are conditional on caregiving? We find that
the mitigating effects are generally strongest in Belgium, followed by Luxembourg and Slovenia.
Such credits hardly exist in Portugal, while in Liechtenstein they have only a small impact.
However, the consequences of either working part time or interrupting work can also be miti-
gated via general rules in the system that are unrelated to caregiving (such as in Portugal and
Liechtenstein). They can, on the other hand, be aggravated by the existence of higher accrual
rates for individuals who extend their careers, as in Luxembourg and Slovenia.
Keywords
Informal care, pension, gender pension gap, microsimulation
H55,J32,C15
Introduction
About 44 million adults in the European Union (EU) (12% of the adult population) frequently care
for a disabled or infirm family member, neighbour or friend more than twice a week (Eurofound,
2020: 7). Women are more likely than men to provide informal care and they provide more hours of
informal care (OECD, 2020: 3). In the EU, 59% of adult informal carers are women, a figure which
ranges from 52% in Germany to about 65% in Poland, the Czech Republic and Lithuania. The
gender difference is especially large in the 45-64 age group where, in most Member States,
between 10% and 30% of men and between 20% and 40% of women provide informal care
(European Commission and Social Protection Committee, 2021a: 75).
Since informal care is unpaid, yet often occurs over a long period of time and can be physically
and mentally demanding, it is often accompanied by a reduction or abandonment of professional
activity by the caregiver (Ciccarelli and Van Soest, 2018; European Commission and Social
Protection Committee, 2021a; Evandrou and Glaser, 2003; Heitmueller, 2007; Henz, 2004), a
lower probability to re-enter employment (Ehrlich et al., 2020), lower future and lifelong earnings
and lower-status occupations (Budig and England, 2001; European Commission and Social
Protection Committee, 2021a; Gash, 2009; Van Houtven et al., 2013). Care for young children
is also associated with a reduction in working hours or an interruption of employment for
mothers (Hofman et al., 2020). In most EU countries, the pension received during retirement is a
function of past labour market income and some social insurance benefits. As care-related
effects on wage income accumulate over the life course, caregiving may be associated with a
van den Bosch et al. 45
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