The Pattern and Consequence of Survivorship Provisions in Public Retirement Plans: Comparison of Britain, U.S., and Germany

Abstract

The economic consequences of reform of social retirement systems for women - who are more likely to receive family benefits from social old-age insurance programs - and particularly for widows, have been a major focus of public policy discussions. As work careers for women have lengthened, some question the need for family benefits, originally designed to protect non-working spouses against the income consequences of a working spouse's retirement or death. Others argue that a continuing pattern of unequal division of paid work responsibilities between spouses and myopic decisions about the allocation of retirement resources over the lifetimes of both spouses indicate an ongoing need for survivor benefits. A Gerontological Society of America Task Force on Women concluded that future low-income elderly women will be no better off than are today's lower income older women, (Smeeding, Estes and Glasse, 1999). The Task Force recommended more research on ways to improve the economic position of survivors. This paper builds on this recommendation by comparing the income consequences of a husband's death in three countries. The study examines how income sources change when married women in Britain, the U.S. and Germany are widowed, and it draws inferences about the income consequences of specific retirement and survivorship provisions. The data come from the Cross-National Equivalent File, which includes data from the German Socio-Economic Panel (1984-1997), the U.S. Panel Survey of Income Dynamics (1980-1997) and the British Household Panel Survey (1991-1998).