Pension Reforms and Gender Equality in Latin America

As most other components of social protection systems, pension schemes can have a substantial impact on gender equality. The way in which pension systems distribute rights, resources and risks can affect men and women differently and serve to mitigate, reproduce or amplify the gender inequalities emerging from the labour market, the distribution of work in the household, and so on. Pension systems can also favour some family arrangements over others and introduce incentives that consolidate specific gender roles. The types of benefit that a pension system provides, the mechanisms for the calculation of benefit levels and the eligibility conditions vary between countries with different effects on the gender distribution of old-age protection and the relative position of men and women vis-à-vis the pension system.

Latin American countries originally embraced the Bismarckian model of old-age protection with earnings-related contributory systems. Coverage in contributory systems depends on participation in the formal labour market, earning levels and family composition, and hence they tend to reproduce the labour market inequalities between men and women. Starting with Chile in the 1980s, a number of Latin American countries implemented structural pension reforms that fully or partially replaced these systems with fully funded schemes of individual accounts, in which benefits depend on individual pension savings. By strengthening the connection between lifetime contributions and benefits, the new pension schemes raised a new set of gender equality issues.

More recently, increasing concern about the capacity of women to build sufficient pension savings over their lifetimes to obtain adequate protection in old age has motivated a number of studies and policy innovations. Some Latin American countries have started to introduce gender-friendly elements in their pension systems to try to improve women’s access to social security. This paper evaluates the sources of gender inequality in old-age protection and the way in which recent pension reforms in Latin America have tried to compensate and overcome some of the gender biases in previous systems. It reviews the features of the labour market and of the pension system which can affect pension coverage and benefits for men and women. It also studies the gender equality implications of contributory systems and of individual pension accounts in Latin America. Three case studies are presented: first, the case of Chile, which is one of the first examples of a post-privatization reform; second, the case of Bolivia, which combines universal protection with a recently reformed social security system that covers a relatively small share of the labour force; and third, Argentina, where private individual accounts have recently been replaced by pay-as-you-go pensions, along with other innovations in pension coverage and benefit indexation.

The paper shows that recent pension reforms in the three countries studied have embraced some of these measures, and the gender equality issue is slowly being introduced in Latin American pension reform agendas. However, gender gaps are unlikely to disappear. Differences in pension rights and benefits between men and women may lessen if women enter the labour force in greater numbers, and gender gaps in the labour market diminish. Until this happens, pension systems need to keep redesigning the basis for allocation of rights and benefits to avoid, reduce and compensate the gender gaps that still exist.

Camila Arza is research fellow at the National Council of Scientific and Technical Research and the Latin American School of Social Sciences, Argentina.

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