Gender gap and retirement decisions: the maternity pension supplement in Spain

Casanova, Jorge Luis; Guias, Horia Bogdan; López, Carlos Javier; Salvanti, Andrea; Sewell, Patrick

Gender gap and retirement decisions: the maternity pension supplement in Spain

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Casanova, J, Guias, H, López, C, Salvanti, A, Sewell, P. Gender gap and retirement decisions: the maternity pension supplement in Spain. 2021. handle: http://hdl.handle.net/10230/49162

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Abstract

In line with the growing governmental efforts to reduce the gender income gap, in 2016 a retirement pension supplement for mothers of two or more children was introduced in Spain. Through an Oaxaca-Blinder decomposition analysis, we find that the policy had a smaller-than-expected shrinking effect in the gender gap in retirement pensions. Using a difference-in-differences approach, we identified that the trade-off between the supplement incentivizing early retirement and the penalty this retirement modality entails in Spain as the mechanisms driving this result. Finally, we developed a dynamic choice model to simulate women’s behavior under alternative versions of the policy.