Personal income after retirement comes from financial reserves, the build-up of which depends on initial social characteristics (positional factors, such as gender or age), career paths (processual factors) and institutional arrangements relating to the pension system (structural factors). The results of this study by Olga Ganjour, Jacques-Antoine Gauthier, Jean-Marie Le Goff and Eric Widmer, from the universities of Geneva and Lausanne, highlight the interaction of multilevel systems of advantages and disadvantages, such as latent social characteristics and career paths, for retirement benefits.
Using biographical data from SHARELIFE, the researchers observe four types of professional trajectory characterising the end of a professional career and the transition to retirement. They focus on career paths between the ages of 45 and 70.
- full-time employment with pension plan (PP) contributions (32% of the sample)
- full-time employment without PP contributions’ (26%)
- part-time employment with and without PP contributions’ (19%)
- part-time employment with and without PP contributions’ (19%)
Year of birth and gender influence retirement finances
The groups of individuals included in these different career paths do not have the same opportunities to accumulate financial reserves for their retirement. People who have worked full-time and contributed to a PP have a greater capacity to save for retirement than those who have not contributed to a PP or who were either employed part-time or unemployed. However, positional factors, in particular gender and birth cohort, have an impact on the development of career paths. Women have lower incomes than men. On the other hand, men born between 1940 and 1949 are more economically advantaged and have a smaller variation in retirement income than men born before 1940. It is therefore possible that social characteristics do not play the main role in building up financial reserves over the course of a lifetime, and that their influence is moderated by career paths. As far as structural factors are concerned, access to occupational pension provision compensates only marginally for inequalities linked to social characteristics.
Full article
Ganjour, O., Gauthier, J., Le Goff, J., & Widmer, E. D. (2023). Income inequality in later years: occupational trajectories or initial social characteristics?. Longitudinal and Life Course Studies, 14(4), 542-565. Retrieved Feb 20, 2024, from https://doi.org/10.1332/175795921X16805239728832