Fabio Blasutto
(ULB)
will give a presentation on
Pension Caregiver Credits and the Gender Gap in Old-Age Income
Abstract: We study a 2001 pension insurance reform in Germany that introduced additional caregiver credits for working mothers with children between the ages of 3 and 10. Using administrative social security data from Germany combined with a difference-in-differences design, we find that the reform leads to a 66.5% increase in yearly retirement contributions during the eligibility period. 66% of the total effect can be explained by a change in the labor market outcomes of eligible mothers, while the remaining 34% is the mechanical effect of the reform. We find a significant increase in employment earnings, driven by both an increase in employment and a switch from marginal to employment subject to social security contributions. This translates into a 9.1 percentage point (18.3%) reduction in the gender gap in lifetime non-marginal earning points. Finally, a simple life-cycle model predicts that the pension reform leads to a 9.8% increase in retirement income and a 12% reduction in the gender gap in old-age income.
(with Ashley Wong and Francesca Truffa)