Gender Pension Gap in Eastern and Western Germany

Abstract

Now, 25 years after the fall of the Wall, eastern and western German men are receiving similar state pensions, a main pillar in the system of old age provision in Germany. In contrast, the average pension paid to eastern German women far exceeds that of their western German counterparts. A cohort comparison shows a narrowing of the gender gap when it comes to pension entitlements in eastern Germany. This decline is less a result of higher pension entitlements among eastern German women and more a consequence of significant losses among eastern German men. In western Germany, however, the pension gender gap will remain consistently high throughout the cohort comparison. Western German women born in the baby boom years have only managed to narrow the gender gap to a limited extent despite their increasing labor participation. The present analysis first compares the development of average pension payments received by pensioners in eastern and western Germany who retired between 1993 and 2013. A cohort comparison analyzes the extent to which the existing east-west differences, particularly among women, are likely to continue into the future.