Caregiver pension credits for women: Recent experience in Uruguay

Abstract

AbstractThis article analyses the effects of the implementation of childcare pension credits for women in Uruguay, which were introduced as part of a social security reform in 2009. Using microdata from administrative records of the social security administration, we show that around 60% of retired women have used these credits between 2009 and 2015, computing on average 2.7 additional years of service. The use of childcare credits has been higher among more vulnerable female workers. Among women with lower pensions, childcare credits are used both to reach the required years for retirement and to improve the amount of pensions, whereas for women in the higher deciles the program mainly impacts on the amount of pensions. Using a difference in difference approach, we also show that the program has, to some extent, acted as a substitute for the mechanism of computing years of service through the declaration of witnesses, an extended practice in Uruguay to access pensions. Lastly, we show that, if these credits had not been incepted, female access to pensions would have been significantly lower, and gender gaps both in access to, and in the amount of, pensions would have been higher.