Bridging Partner Lifecycle Earnings and Pension Gaps by Sharing NDC Accounts

Abstract

This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries.

Annuities in (N)DC Pension Schemes: Design, Heterogeneity, and Estimation Issues

“…Taking this one step further, continuing to use Sweden as an example, recent work by Klerby, Larsson, and Palmer (2019) finds that the pension account of a Swedish mother born in 1970 reflects an estimated average earnings gap of 20 percent vis-á-vis the father of her child and somewhat more for the Swedish standard of almost two children per mother (Klerby, Larsson, and Palmer 2019). The gap originates in time with the birth of the mother's first child.…”

“…The Swedish pension gender gap (in 2013) based on the average of all pensioners -just the public pension and excluding the minimum pension guarantee -was 33 percent. 4 With a gender wage gap somewhat better than the OECD average hovering around 10 percent, this suggests a gap component of around 20 percent, representing less time devoted to work in the formal labor market.Using NDC individual accounts from 1960,Klerby, Larsson, and Palmer (2019) study the NDC pension accounts of spouses giving birth to at least one child for mothersborn 1955-1970,…”