The minimum pension and its effect on the gender gap in retirement pensions in Spain

ABSTRACT

The gender gap in pensions is greater than the gender gap in wages in the majority of countries in the European Union. Similarly, more women live on a minimum pension than do men. Therefore, the measures that are implemented for minimum benefits must be analysed from a gender perspective to avoid further increasing the gender gap in wages. This study analysed an unexplored aspect in both the academic and judicial spheres, namely, the regulation of the minimum pension in Spain after the 2011 reform and its effect on women’s pensions. The analysis highlights indirect sex discrimination in the aforementioned regulations. Therefore, modification measures are proposed to help reduce the gender gap in pensions.

KEYWORDS:

• Gender gap
• contributory minimum pensions
• indirect discrimination
• retirement pensions
• spain

Disclosure statement

Our research could be a matter of interest to Insurance companies, since it reveals a deficiency on the Public Pension System, which could be covered, to some extent, by the Private Pension System.

Geolocation Information: SPAIN

Notes

1. This is the case in Cyprus, Portugal, Greece, Italy, Malta, Slovakia, Romania, the Netherlands, and Spain, according to data on EU Sustainable Development Goals (SDG) published by Eurostat https://ec.europa.eu/eurostat/cache/metadata/en/sdg_03_10_esmsip2.htm.

2. According to the CJEU (case C-450/18, of 12 December 2019), the Spanish provision that recognizes a pension supplement for mothers who have two or more children is contrary to the Council Directive 79/7/CEE of 19 December 1978, on the progressive application of the principle of equal treatment between men and women in matters of social security and, therefore, all parents who are in an identical situation should also be recognized.

3. The first of the CJEU, case C-385/11 of 22 November 2012, and the second of the Constitutional Court, judgement 61/2013, of 14 March 2013.

4. For an in-depth analysis, please refer to Solís Prieto (2019).

5. These changes are only applicable to pensions from 1-1-2013.

6. The computation of this additional income must be made in accordance with the provisions of the tax legislation; that is, expenses that the tax legislation considers essential for obtaining the minimum supplement must be deducted from the full income.

7. In 2020, this limit is 7,638 euros per year without a dependent spouse and 8,909 euros per year with a dependent spouse.

8. La Muestra Continua de Vidas Laborales (MCVL) [The Continuous Sample of Working Lives] is a non-stratified random sample with information from more than 1.2 million individuals, representing 4% of all individuals who have maintained a link to Social Security during a given year. This database is published annually by Social Security, and we have used the data on 2018. For more information on the MCVL, see MESS (2015), Durán (2007), Lapuerta (2010) and Perez-Salamero, Regúlez Castillo, and Vidal-Melia (2016).

Additional information

Funding

This work was supported by the Spanish National Plan for Scientific and Technical Research and Innovation DER-2017-86394-C2-2-R. Project title: ¿Es posible un sistema de pensiones solvente y suficiente en España? recomendaciones para conseguir el equilibrio perfecto (‘Is a solvent and adequate pension system possible in Spain? Recommendations to get the perfect balance’). This work was supported by the European Union in the Horizon 2020 Project, under the REC (Rights, Equality and Citizenship) Programme, Grant Agreement number: 856593. REC-RDAP-GBV-AG-2018. Project title: Economic violence: opening pathways across and unexplored gender-based violence issue for guaranteeing the women and children´s fundamental rights This work was supported by the Extremadura Government by Decreto 68/2016, de 31 de mayo, ayudas destinadas a la realización de proyectos de investigación en los centros públicos de I+D+I de la Comunidad Autónoma de Extremadura, and resolution from February 1, 2019 from the Secretaria General de Ciencia, Tecnologia e Innovación, published in DOE num 27 from February 8, 2019. Project title: Presente y futuro de la Brecha de Género en las pensiones en Extremadura. (Present and future of the Gender Gap in Pension in Extremadura).

Notes on contributors

Inmaculada Domínguez Fabián

Robert Meneu Gaya is an Associate Professor in the Department of Mathematics for Economics and Business at the University of Valencia as well as a member of the research group ‘Pensions and Social Security’ at the University of Valencia and University of Extremadura. Current research interests comprise gender studies and social protection studies. He has participated in more than ten competitive research programmes, such as the European Commision Working and Financial programme ‘Horizon 2020’, about gender and economic violence. His work has been published in the following journals: Applied Economic; Social Indicators; Revista de Economía Aplicada; Revista Hacienda Pública Española; Revista de Ciencias Administrativas y Sociales (INNOVAR) and the International Social Security.

Enrique Devesa Carpio

Enrique Devesa Carpio is an Associate Professor in the Department of Finance Economics and Accounting at the University of Valencia as well as a member of the research group ‘Pensions and Social Security’ at the University of Valencia and University of Extremadura. Current research interests comprise gender studies and social protection studies. He is a member of the Spanish Institute of Social Welfare Policies and of the Institute of Spanish Actuaries. He was proposed by the Spanish Council of Ministers as a member of the Committee of Experts that developed, in 2013, the sustainability factor of the public pension system in Spain. He has participated in more than ten competitive research programmes, such as the European Commision Working and Financial programme ‘Horizon 2020’, and has been the main researcher on seven of these. His work has been published in the following journals: Applied Economic; Social Indicators; Journal of Risk and Insurance; Journal of Economic Policy Reform; Revista de Economía Aplicada; Revista Hacienda Pública Español; Revista de Ciencias Administrativas y Sociales (INNOVAR) and the International Social Security.

Borja Encinas Goenechea

Borja Encinas Goenechea is an associate professor in the Department of Financial of the University of Extremadura and a member of the research group ‘Pensions and Social Security’ at the University of Valencia and University of Extremadura. Current research interests comprise gender studies and social protection studies. He has participated in more than ten competitive research programnes, such as the European Commision Working and Financial programme ‘Horizon 2020’ about gender and economic violence. His work has been published in the following journals: Applied Economics; Social Indicators; Revista de Economía Aplicada; Revista Hacienda Pública Española; Revista de Ciencias Administrativas y Sociales (INNOVAR) and the International Social Security.

Robert Meneu Gaya

Inmaculada Dominguez Fabian is an Associate Professor in the Department of Finance at the University of Extremadura as well as a member of the research group ‘Pensions and Social Security’ at the University of Valencia and University of Extremadura. Current research interests comprise gender studies and social protection studies. She has participated, as Principal Researcher, in more than ten competitive research programmes, such as the European Commision Working and Financial programme ‘Horizon 2020’, about gender and economic violence. Her work has been published in the following journals: Applied Economics; Social Indicators; Journal of Risk and Insurance; Insurance, Mathematics and Economics; Revista de Economía Aplicada; Revista Hacienda Pública Española,; Revista Astin Bulletin; Revista de Ciencias Administrativas y Sociales (INNOVAR) and International Social Security.