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Is There a Child Penalty in Pensions? The Role of Caregiver Credits in the French Retirement System

  • Carole BonnetEmail author
  • Benoît Rapoport
Article
  • 4 Downloads

Abstract

The effect of motherhood on women’s labour supply has been the focus of a large body of economic literature over the last decades. Since the mid-1990s, increasing attention has been paid to the “family pay gap” or the “motherhood wage gap”, i.e., the differential in wages between women with and without children. As for the long-term effects of children on pension entitlements, the empirical evidence is limited. Nevertheless, different countries have introduced pension caregiver credits into their pension systems in order to compensate parents—especially mothers—for the impact that children can have on their careers and, ultimately, on their retirement benefits. Whether or not these caregiver credits achieve this objective is still an unresolved issue. We deal with this question in the French case, as the French pension system includes the widest range of caregiver credits compared to other countries. We first compute the family pension gap at given ages for women born between 1950 and 1966, initially while ignoring caregiver credits. This gap increases with the number of children. We then show that caregiver credits do fulfil their role of compensating women for the impact of children on their pension entitlements. Taking these benefits into account offsets almost completely the difference in pension entitlements among women, whatever the number of children. For men, children have almost no impact on their pension entitlements, and caregiver credits play a minor role with the one exception that they favour the fathers of at least three children.

Keywords

Pension Gender Caregiver credits Family pension gap Gender pension gap 

Notes

Acknowledgements

The authors would like to thank Virginie Andrieux for her fruitful collaboration in an earlier version of this paper. We are grateful to Anna d’Addio for her helpful comments and to the DREES (Ministry of Labor and Social Affairs) for providing data and for their remarks on an earlier draft of this work. Benoît Rapoport thanks the iPOPs Labex from the heSam Pres (reference ANR-10-LABX-0089) for financial support. We also thank two anonymous referees for their comments and suggestions. The usual disclaimer applies.

Compliance with Ethical Standards

Conflict of interest

The authors declare that they have no conflict of interest.

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Copyright information

© Springer Nature B.V. 2019

Authors and Affiliations

  1. 1.Institut National d’Etudes Démographiques (INED)ParisFrance
  2. 2.Centre d’Economie de la Sorbonne UMR CNRS, Maison des Sciences EconomiquesUniversity Paris 1 - Panthéon SorbonneParis Cedex 13France

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