The Macro Center for Political Economics announced findings this week that have important ramifications for women's participation in the Israeli workforce and raises concerns over gender imbalances caused by government social policy.

According to the findings of the center’s senior researchers Hagar Tzameret and Ziv Rubin culled from Central Bureau of Statistics data gathered over the last 40 years, the average monthly pension of Israeli women is approximately half (NIS 4,000 per month less than) that of men in the country. The three main causes for dramatically lower pensions for women as listed by the study are the female-male wage gap, the earlier female retirement age as set by Israeli labor law, and generally lower female workforce attachment due to breaks in employment taken for the purpose of child-rearing.

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Another factor in Israeli women's lower monthly retirement pensions is their slightly longer life expectancy causing them to stretch their pension benefits over a slightly longer period of time; however, Tzameret and Rubin concluded that this did not significantly contribute to the vast gap measured in pension payments towards members of the different sexes.

Running long-term model simulations based on the CBS labor market data, the researchers found that men and women who both worked full-time for 564 consecutive months (47 years) earn NIS 9,100 and NIS 5,150 per month, respectively, in pension benefits. This large difference was attributed to "discrimination in the employment market," with women being doubly hit, first with lower immediate earnings and then, as a direct result, with lower post-retirement pension benefits.

However, women are currently legally entitled to retire at full pension at the age of 64 as opposed to men who can retire at full-benefits only upon reaching the age of 67. Israeli women who take advantage of this earlier retirement age, though, experience a drop in their already relatively low pension benefits.

According to the reported findings, the average woman who works for 540 months (45 years) will receive a pension of only NIS 4,430 per month - a 16 percent drop in pension earnings compared to the NIS 5,150 they would have received if they had worked 564 months before retirement.

Another result from the study’s model showed that an average Israeli woman who ceased to work after the birth of a child for a period of seven years to care for her growing newborn would receive a post-retirement monthly pension of NIS 3,450 - a 28% drop in pension benefits compared to women who do not cease to work full-time. This large drop occurs when woman exit the full-time labor force, even if only to reduce their work load or leave for period of time before resuming full-time work. This reduced workforce participation hits women doubly hard, first by hurting their immediate earning power and again through its effect on lowering pension contributions and, therefore, the future pension payments they can expect to receive.

In explaining the results, Macro Center for Political Economics Director-General Robbie Nathanson stated, "The study shows a trend of improvement of women's integration into the labor market, but despite the improved status of women and their place in the Israeli labor market, there still exist additional difficulties and obstacles that prevent full equality with working males. These barriers to equality are tied to the policies that Israeli governments have instituted over a number of years, and with reforms of these policies it is possible to overcome these obstacles with greater ease."

Nathanson added, "There is no substitute for a government policy that fosters employment."

The study was published with the support of the Macro Center for Political Economics’ Zichron Yaakov Initiative in partnership with the Friedrich Ebert Foundation, an independent organization affiliated with the German Social Democratic Party.

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