Large gender gaps apparent in pension savings

Because men tend to work longer hours, likely because women pick up slack in household chores and child-rearing, there is an overall 15.5% gender gap.

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April 19, 2015 18:29
2 minute read.
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PARTICIPANTS IN the Israel Tech Challenge work during the 36-hour hackathon in Tel Aviv this week. (photo credit: ISRAEL TECH CHALLENGE)

The gap in wages between men and women has led to a significant gender gap in pension savings, according to a study by the Economy Ministry’s Equal Employment Opportunity Commission, released Sunday.

While men and women from various population groups were about as likely to save for pensions, men made a significantly higher contribution on average.

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“It is surprising to discover, despite gender gaps in pay, that there are not significant gender disparities in the rates of contribution to pensions in every group of the population,” said Tziona Koenig-Yair, the Equal Opportunity Commissioner.

On average, men in Israel take home 34% more than women. The income gap is largest among haredim (43%). Former Soviet citizens, non-haredi Jews, and Ethiopian immigrants have an income gap of 33-37%, while among Arabs it’s 22%.

Because men tend to work longer hours, likely because women pick up slack in household chores and child-rearing, some of that disparity shrinks when examining hourly wages, where there is an overall 15.5% gender gap. On an hourly basis, the gender wage gap is 24% for haredim, 21% for non-haredi Jews, and 12% for Ethiopians.

The latter group, the report noted, likely has a small gap, because so many of Ethiopians are low-wage earners to begin with.

Surprisingly, among Israel’s Arabs, women actually earn 9% more per hour than their male counterparts.

Those gaps in income mean that men and women end up saving in different amounts for their retirement.

“Israel is among the leading countries in wage gaps, and the data highlights on the gender disparities in wage on the pension savings potential of women in various population groups” Koenig-Yair said.

“It is evident, therefore, that while the rate of men and women contributing to pensions in each population group is similar, the average pension contributions creates an additional gap in the economic strength of men in relation to women.”

Among haredim, who had the largest gaps in average contributions between men and women, the disparity was 48% (i.e. haredi men invested 48% more in their pension funds than haredi women). The gap for for non-haredi Jews was 39%, followed by 33% for former soviet citizens, 24% for Arabs and 17% for Ethiopians.

While men and women within each population group were about equally likely to make pension contributions, there were large disparities between the population groups.

Immigrants from the former Soviet Union were the champions in savings, with almost three-quarters likely to make pension contributions.

Non-haredi Jews were only slightly behind.

Among haredim, the percentage of pension contributors was around 60%, followed by Ethiopians in the low-50s and Arabs in the mid-30. In other words, former Soviet citizens were almost 2.5 times as likely to make contributions to pension funds than Arabs.

The study relied on Central Bureau of Statistics data from 2012.


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