Worklife Determinants of Retirement Income Differentials Between Men and Women

Women enter retirement having spent fewer years in market, earned less over their lifetimes, and work in different jobs than men of the same age. This study examines whether these differences in work life experiences help explain why many women end with lower level of retirement income in old age. We use Health and Retirement Study (HRS), which provide information on labor market histories along with the ability to predict retirement income from employer pensions, social security benefits, and investment returns. We document differences in anticipated retirement income by sex that exist largely between non-married men and women. Multivariate models show that 85 percent of this retirement income gap can be attributed to differences in lifetime labor market earnings, years worked, and occupational segregation by sex. Our results suggest that as women's work life experiences become more congruent with men's over time, the gap in retirement income between men and women may shrink.