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Pensions and Partnerships: some implications of

relationship breakdown

GENET Conference: Partnership BreakdownQueen’s College, Cambridge

Friday 7th March 2008

Debbie Price

debora.price@kcl.ac.uk

Institute of Gerontology, King’s College London

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The Pension Problem for Women

• UK Pension structure relies heavily on private pension accumulation;

• Strongly associated with history of paid work;

• Women acutely disadvantaged – histories of breaks in paid work and low earnings; poor employer provision

• Poverty of women in old age now widely acknowledged (esp. divorced, but also widowed);

• Widespread gender inequalities in income in later life;

• Women are by far the majority of pensioners, but the current system of accrual of (all) pension rights does not provide women with adequate income in old age.

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The Social Dimension to Pensions

• Changes in labour markets• Flexible working, Part-time working• Employers pension provision• Which sectors, working for how long, and earning how

much?

• Changes in family formation• Later child-birth, partnering, separation motherhood &

marriage• Increasing risk of partnership breakdown, serial

partnerships• Increasing risk of living alone• ? Changes in gender roles and identities

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Gendered households, gendered labour

Within couples, women take on

care work

Women take low paid,flexible work

In female dominated industries

Women’s work is low paid, with poorworking conditions

Men work long hours, take responsibility

For family income

Women who carecan’t compete

In the labour market

GenderedIdentities andDependencies

Adapted from Bellamy and Rake (2005)

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Inequality of Earnings

• Research into the management of household money shows that– Household resources are not shared equally– Spending differs between men & women (e.g. women spend on

children and child care)– Financial inequality is a source of power and conflict within the

household• Some financial behaviours are associated with the

degree of inequality in a relationship• Earnings inequality leads to ‘choices’ in the household

division of labour which in turn leads to lower lifetime earning for dependent partners

• Earnings inequality becomes especially important when couples separate

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Legal Context

• Men and women within couple relationships are rarely financial equals because of gender divisions and norms in society

• Increasing legal recognition of non-marital domestic relationships - property and income rights recently extended to same-sex cohabitants

• Opposite sex cohabitants have very limited legal remedies – confined to trust law

• Law Commission currently looking at law reform

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Earnings Inequality and Changing Family Forms

• Are those who ‘choose’ not to marry displaying a particular type of independence which implies greater gender equality of earnings?

• Issue: regulation of legal marriage to redress gender inequalities in earnings

– Maintenance, division of assets & pensions, use of NI contribution record, inheritance rights

– Little financial redress after breakdown of cohabitation

• Does different marital status of itself imply that earnings inequalities and financial behaviours are different? Are cohabitants ‘more equal’ than legally married?

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Data Presented Today• How important is motherhood in considering

pension provision?• How does earnings inequality within the

household relate to pension provision? Pension provision is linked to labour market participation, but is it also linked to ‘provider’ role?

• In terms of within-couple earnings inequality, how different are legally married and unmarried cohabitants? How is motherhood associated with earnings inequality for different types of cohabitants? What are the implications for pension provision?

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Data

• GHS 2001 & 2002 combined; values are as at 2002

• About 13,000 households in each year, response rate c. 70%

• Between ages of 20 and 59 10,314 men, 11,087 women

• 6,141 couples

• ‘Third tier pensions’ – pension over and above the (low) compulsory level of pension provision

• Cross-sectional data: age/cohort effects can’t be distinguished; nor individual trajectories & selection effects

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Children and Earnings

• 54% of mothers with a child under 5 are in employment, 66% with a child under 16; the majority part-time

• 91% of fathers are in employment, almost all full time

• Fathers work the longest hours of all men

• The motherhood ‘pay gap’, the fatherhood ‘premium’

11Source: General Household Survey 2000/1 and 2001/2, mothers whose dependent children live elsewhere, and those looking after others’ children have been excluded; authors’ analysis

Median weekly earnings according to motherhood and age group

0

50

100

150

200

250

300

350

never had a child youngest 0-4 youngest 5-9 youngest 10-15 youngest 16+ (homeor away)

Med

ian

gros

s we

ekly

ear

ning

s

20-29

30-39

40-49

12Source: General Household Survey 2000/1 and 2001/2, mothers whose dependent children live elsewhere, and those looking after others’ children have been excluded; authors’ analysis

Percentage contributing to additional pensions by motherhood and age group

0

10

20

30

40

50

60

70

20-29 30-39 40-49Age group

Pe

rce

nt

never had a child

youngest 0-4

youngest 5-9

youngest 10-15

youngest 16+(home or away)

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Women

Age Group

55-5950-5445-49'40-4435-3930-3425-2920-24

Mean R

atio o

f ow

n e

arn

ings t

o join

t earn

ings

.42

.40

.38

.36

.34

.32

.30

.28

.26

.24

Degree of Earnings Inequality within Couples:

Women aged 20 to 59

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Women

2nd quintile: joint earnings

Age group

50-5940-4930-3920-29

Me

an

Ra

tio o

f o

wn

ea

rnin

gs

to jo

int

ea

rnin

gs

.5

.4

.3

.2

Maternal status

never had a child

child 0 - 5

child 6 - 15

ch 16+ home or gone

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Influence of degree of inequality (dependence) after multivariate analysis: likelihood of contributing to a

third tier pension

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

0% < 20%(35%)

20% - 40%(28%)

40%-60%(24%)

60%-80%(4%)

80% - 100%(9%)

Degree of earnings equality

Od

ds

rati

os

(ref

: eq

ual

ear

ner

s)

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Marital History of Currently Cohabiting, 20 - 59

Men Women

  n= % n= %

Never married cohabitants 828 12.9 848 11.7

First marriage 4,462 69.5 5,144 70.7

Separated from 1st mar, cohab 46 0.7 43 0.6

Divorced once, cohab 230 3.6 284 3.9

Widowed once, cohab 10 0.2 10 0.1

Second marriage 726 11.3 815 11.2

More than two marriages haveended (either married 3+ or cohabiting now)

114 1.8 132 1.8

All cohabiting 6,416 100% 7,276 100%

Source: GHS 2001 and 2002

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Does legal marital status make a difference to the extent of women’s inequality of earnings?

Cohabiting women

Marital status

second marriage

divorced once

first marriage

never married

Mean R

atio o

f ow

n e

arn

ings t

o join

t earn

ings

.39

.38

.37

.36

.35

.34

.33

.32

.31

Source: General Household Surveys, 2001 and 2002, authors’ analysis

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Cohabiting Women: Extent of Earnings Inequality

% of joint earnings

NM 1st Mar Div 2nd Mar All

0% 15 21 14 20 20

1%-20% 7 17 14 16 15

21%-40% 26 29 30 28 28

41%-60% 41 21 28 22 24

61%+ 11 13 15 15 13Total 100 100 100 100 100

n= 648 3895 217 603 5363

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  WOMENNM cohab 1st mar Div cohab 2nd mar

  %Mean Age %

Mean Age %

Mean Age %

Mean Age

Never had a child 63 29 35 39 49 41 43 56

Ch 0-5 27 29 24 32 20 33 16 37

Ch 6-15 10 34 25 40 22 39 25 42

Children 16+ (home or gone)

1 42 17 52 8 48 16 51

All 100% 29 100% 42 100% 42 100% 46

n= 849 5,131 281 813Source: GHS 2001 and 2002

Cohabiting women aged 20 – 59, proportions with children & mean age in each marital status

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Loglinear Model

• Used here to examine, for men and women separately, the four way contingency table: – Earnings inequality in couple, grouped (I)– Marital Status (M)– Age group of youngest dependent child in the family

(C)– Age group of Respondent (A)

• Association between marital status and inequality does NOT improve the model fit

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Conclusions: Women

• In considering earnings inequality within partnerships, marital status is not an explanatory variable.

• Motherhood and how old women are is largely determinative of the degree of inequality in their partnerships, whether cohabiting, divorced or married for the first or second time.

• Cohabiting women mimic married women in patterns of gender relations in the household.

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Percentage in third tier pension schemes by partnership status: men and women aged 20 - 59

Women Men

Never married, lone 35 36

Never married, couple 40 52

First Marriage 40 65

Separated, lone 29 58

Divorced, lone 33 40

Divorced, couple 45 58

Widowed, lone 27 47

Second marriage 38 56

Complex history 35 39

Source: GHS 2001 & 2002

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Children and divorced (lone) mothers

0%

10%

20%

30%

40%

50%

60%

Never hada child

Yngst ch0-4

Ch 5 - 10 Ch 11 - 16 Childgrown up

Divorced lone womenin priv/occ pensionschemes

Source: General Household Surveys 2001 & 2002

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Mothers with dependent children: odds ratios comparing pension scheme participation according to legal status –

multivariate analysis

0

0.2

0.4

0.6

0.8

1

1.2

Firstmarriage

Nevermarried(lone)

Sep/div(lone)

Nevermarried,cohab

Div(cohab)

Secondmarriage

Child under 5

Child 6 - 10

Child 11 - 16

*

*

*

** *

* *

*

* Statistically significant at <7%

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Conclusions

• Lack of pension accumulation is largely related to motherhood

• Within relationships motherhood is related to low earnings and inequality of earnings; both are related to lack of pension provision

• Once age and motherhood are taken into account, there are no differences between cohabiting women and married women in the degree of earnings inequality in their relationships

• Other things being equal, never married lone & cohabiting women & lone mothers post separation are far less likely than married women to be participating in third tier pensions (especially with older children)

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Policy implications

• Couples appear to behave (financially) in very similar ways whether married or not married

• Financial disadvantages to mothers are substantial and long lasting

• Lack of legal redress for cohabitants is out of step with the way that men and women live their lives