Pension Benefits and Male-Female Wage Differentials

Abstract

Female members of defined benefit pension plans will receive greater pension benefits than males with identical work and earnings histories, since females have greater longevity. Yet females have higher turnover rates and lower earnings, both of which serve to reduce pension benefits relative to those received by males. We illustrate the net effect, on pension benefits in defined benefit plans, of gender differences in longevity, turnover, and wages. We conclude that females tend to receive lower pension benefits and therefore that pension benefits are more likely to exacerbate than to reduce the male-female wage gap.