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Legislation Publications Pension models About project Statistics

INTRODUCTION

CHAPTER I. Overview of gender issues in pension systems from different countries
1.1. Pension system reform and gender equality issues
1.2. European Union countries with a developed „social state”
1.3. Post-socialistic countries

CHAPTER 2. Gender analysis of pension and labor legislation of the Republic of Moldova
2.1. International labor standards and national legislation of the Republic of Moldova
2.2. Legal insurance of equal access to labor and professional occupations: employment guarantees
2.3. Right to free choice of profession, professional training and retraining, professional promotion. Restrictions related to women’s work
2.4. Equal remuneration for the work of equal value
2.5. Right to healthy and safe working conditions. Guarantees and privileges for pregnancy and maternity
2.6. Right to social insurance including right to pension

CHAPTER 3. Analysis of demographic context of gender issues in the Republic of Moldova
3.1. Gender asymmetry of sex/age structure of the population of the Republic of Moldova
3.2. Differences in conditions and causes of mortality of men and women, men’s over mortality rate
3.3. Gender discrepancy of the indexes of life expectancy in Moldova and their dynamics
3.4. Life expectancy on pension
3.5. Gender differences in the correlation between the duration of the working life and life on pension
3.6. Impact of birthrate on the workers length of insured service

CHAPTER 4. Labor market of the Republic of Moldova and its impact on the trends of pension system reform: gender aspects
4.1. Economic activity, employment and unemployment
4.2. Employment by economic sectors

CHAPTER 5. Salaries and incomes

CHAPTER 6. Informal employment

CHAPTER 7. Issues of social breaks in employment

CHAPTER 8. Gender issues of current pensioners
8.1. Gender structure of pensioners

CHAPTER 9. Forecast of the specifics of pension insurance of men and women, pension transfers between sexes in the established pension system

CHAPTER 10. Gender analysis of the formulas for old-age pension calculation
10.1. Analysis of old pension formula for calculation of old-age pension
10.2. Analysis of the new pension formula for calculation of old-age pension
10.3. Change of gender discrepancy in pensions in the transition to the new pension formula

CHAPTER 11. Increase of the retirement age. Equalizing the retirement age?
11.1. Advantages and disadvantages of the retirement age increase and its “equalization” for men and women
11.2. Individual pension burden or correlation between the duration of the able-bodied age and duration of life on pension
11.3. Change of the probability of living until the retirement for men and women under different scenarios of the retirement age increase

CONCLUSIONS

BIBLIOGRAPHY




Gender aspects of the Republic of Moldova’s pension system

8.1. Gender structure of pensioners

The differences in the life expectancy  (particularly, the life expectancy on pension) of men and women, as well as the gender differentiation of the retirement age, established in the Republic of Moldova, lead naturally to a considerable gender asymmetry of the structure of pensioners. At present the women constitute in fact two thirds of all old-age pensioners (in 2006 amongst the beneficiaries of non-agricultural pensions they constituted 69,3% and amongst beneficiaries of agricultural pensions – 66,1%).

By age the correlation between men and women amongst pensioners is changing. Amongst pensioners up to 62 years there are no men in fact (that is explained by gender differences in the retirement age and specifics of age pyramid in the Republic of Moldova, resulting in simultaneous retirement of men and women from various age groups). At an earlier for men pension age (62-64 years) the situation is changing unexpectedly: the mass retirement of men lead to the fact that the share of women amongst pensioners of this age is decreasing sharply till 60-61%. At older ages on the influence of higher men’s mortality rate, the share of women amongst pensioners starts to grow gradually and reaches 70% among persons aged 80 and over, receiving agricultural pensions and 67% - among beneficiaries of non-agricultural pensions.

         


Source: data of the National Statistic Bureau and Ministry of Health and Social Protection.

The possible increase of the retirement age shall change hardly the gender structure of pensioners. If the retirement age is increased only for women (given their big life expectancy), this shall lead to a certain growth of the share of women among pensioners (due to the reduction of the share of men among pensioners aged 62-64). If the retirement age is increased simultaneously both for men and women, the gender structure of pensioners might remain stable in fact (although the sex/age structure shall change).

The increase of the retirement age on the whole reduces the financial obligations of the state towards pensioners and further feminization of the structure of pensioners shall just contribute to this reduction (after all, the size of women’s pensions is lower than men’s). The gender asymmetry of age/sex structure of pensioners demonstrates that in case of the increase of the retirement age the state obligations towards older people shall change disproportionately.

Gender differences in pensions’ size

According to the official statistic data now in the Republic of Moldova the gender differentiation in the size of old age pensions is not so great. In 2006 among the beneficiaries of agricultural pensions the average women’s pension constituted 93,2% out of the average men’s pension, while among the beneficiaries of non-agricultural pensions- 85%. Thus, the pensions of men and women differ now less than their wages (see Chapter 5).

Such “equality” in the size of pensions is explained mainly by the approach to the record of previous contribution of current pensioners to the economy of the country (the majority of current pensioners receive a pension, gained under the old pension system, where the pension does not depend so much on the worker’s wage and length of service) and the specifics of pension insurance system, including the mechanism of certain equalizing of pensions of the workers with different previous incomes and practice of pension indexation, applied in the recent years.

As for the dynamics by age of gender differences in pension insurance, according to the statistics data the trends of the agricultural and non-agricultural pensions are different (Picture 30). So the gender discrepancy in the size of pensions of the beneficiaries of agricultural pensions is not only small, but continues to go down (in 2001 the average women’s pension constituted 87,2% out of the average men’s pension, and in 2006 – 93,2%). While the gender discrepancy of the beneficiaries of non-agricultural pensions in the size of pensions is higher and continues to increase (in 2001 the average women’s pension constituted 88% out of the average men’s pension, and in 2006 – 85%).

   
Source: data of the National Statistic Bureau and Ministry of Health and Social Protection.

However small are the current gender differences in the size of pensions, their existence is important, since the pension insurance level is very low, though for the majority of older people in Moldova the pension is not only the basic but, as a rule, the only source of income (and for the oldest – the only source). Below we shall try to examine these two aspects.

Now despite the existing increase of actual size of old age pensions, they do not cover the subsistence income of the pensioner. The above-mentioned is related to both agricultural and non-agricultural pensions, as well as women’s and men’s pensions.

The statistic data show that in 2001 among beneficiaries of agricultural pensions the average women’s pension constituted only 36,7% of the pensioner subsistence income, the average men’s pension – 43,7%, while among beneficiaries of non-agricultural pensions - only 30% and 34,1%, correspondingly. There was a negative dependence, according to which the oldest pensioners received the smallest pensions, i.e. those who due to physiological limitations could not supplement independently its budget from labor incomes (Picture 31).

In time the situation is improving gradually. However in 2005 (last year, when such calculations were possible) the average size of pensions of men and women did not exceed the pensioner subsistence income. Thus, among beneficiaries of agricultural pensions the average women’s pension constituted 62,5% of the pensioner subsistence income, the average men’s pension – 73,6%, while among beneficiaries of non-agricultural pensions only 54,7% and 58,7%, correspondingly. Besides now the retroactive dependence of the age and size of pensions is characteristic  only for women and men of the common retirement age (irrespective of pension type) (Picture 32).


 

Source: data of the National Statistic Bureau and Ministry of Health and Social Protection.

As for the sources of incomes of the persons of the retirement age1, here there are also certain gender differences, reflecting first of all the differences in gender roles. According to the official statistic data only 86,7% of the men of early retirement age (62-70 years) consider the pension as their basic source of income, 7,2% - hired labor in non-agricultural sector, 5% - individual household, 0,6% - hired labor in agricultural sector. At the age of 71 and over the pension is the basic source of income for 98,2% (1,6% of men consider the individual household as their basic source of income, while 0,2% - hired labor in non-agricultural sector).

The women situation is another. Already in the first years after the achievement of the retirement age (58-61 years) 90,4% of women consider the pension as their basic source of income (5,9% - hired labor in non-agricultural sector, 3,4% - individual household). At the age of 62-71 the employment as source of income disappears actually from women’s life (95,6% of women consider the pension as their basic source of income, 2,9% - hired labor in non-agricultural sector, 1,5% - individual household). After 71 years the structure of the sources of women incomes becomes identical in fact to the corresponding men structure.

In our opinion the above-mentioned allows to set up a hypothesis according to which the existing pension calculation system and the specifics of demographic situation (as a consequence  a significant part of women reach the retirement age out of the marriage and, hence, without any financial support of the spouse) could contribute to poverty feminization at advanced ages.

Employment of older people

The solution to the issue on the possibility of further increase of pension age requires a preliminary analysis of current situation in the field of economic activity of men and women of the early retirement age, evaluation of their employment parameters.

Unfortunately, the current labor statistic data do not allow to settle this issue, since the age intervals used for the calculation of all parameters of economic activity, employment and unemployment do not correspond to the retirement ages of both women and men (until 2005 the labor statistic indicators were calculated according to “standard five years” “45-49”, “50-54”, “55-59”, “60-64”, “65+”, and from 2005 – according to greater age intervals: for those aged “50-64” and for those “over 65”). Besides the interval “65+” allows to evaluate only the characteristics of women’s economic activity at early pension ages. For men this interval corresponds to the period on pension.

In our opinion even such data could provide general information on the change of the character of employment of older workers by age. The matter is that the lowest level of pension insurance in the country and also a number of mechanisms of the pension insurance system, stimulating the continuation of professional activity after the achievement of the retirement age, somewhat “equalize” the professional interests of the people of pre-pension and pension age.

Sources: data of the Federal Statistics Service of the Russian Federation, Poverty monitoring of the Republic of Kazakhstan, Republic of Azerbaijan State Program on Poverty Reduction and Economic Development 2003-2005 Baku – 2003, Labor Market in Georgia. 2002-2004. Statistical publication – Tbilisi 2005, Employment and unemployment. Findings of the Kyrgyz integrated survey of households, 2003. Special publication.- Bishkek 2005, National statistics bureau of the Republic of Moldova.

According to labor statistic data, in the Republic of Moldova  the persons of young and middle ages are characterized by very low levels of economic activity and employment (lower that the values of these indicators in many CIS countries). The senior able-bodied ages (from 45 years and up to pre-pension age) are characterized by high rates of economic activity and employment (Picture 25). The values of these indicators, calculated for the age between 50-54 have minimal differences compared to the values of similar indicators in other CIS countries. The levels of economic activity and employment for the persons of pension age are naturally decreasing (not so sharply for Moldovan people as for the people from other CIS countries). As result for the persons of pension age the levels of economic activity and employment are situated “in the middle” compared to other CIS countries. Higher (or equal) indicators have countries with low standard of living and considerable problems of population employment. Lower values of indexes are characteristic for those countries, where in the recent years the economic growth is noticed and the situation on labor market is not critical. For example, high or similar to the Republic of Moldova values of the level of economic activity have Kyrgyz Republic and Georgia, lower – Kazakhstan and Russia.

Similar situation is with employment indicators. The employment level among persons over 60 is highest in Georgia (given low employment quality) and lowest in Russia and Azerbaijan (Picture 34).

Sources: data of the Federal Statistics Service of the Russian Federation, Poverty monitoring of the Republic of Kazakhstan, Republic of Azerbaijan State Program on Poverty Reduction and Economic Development 2003-2005 Baku – 2003, Labor Market in Georgia. 2002-2004. Statistical publication – Tbilisi 2005, Employment and unemployment. Findings of the Kyrgyz integrated survey of households, 2003. Special publication.- Bishkek 2005, National statistics bureau of the Republic of Moldova.

As for the trajectories of the change of economic activity and employment rates of men and women at pre-pension and pension ages, they are actually very similar (taking into account the difference in 5 years of the retirement age): the achievement of pension age is for both sexes a key factor in the formation of the need in employment and possibility of meeting this need. At pension age the rate of population economic activity becomes actually identical to its employment rate (at this age the people do not position as “unemployed”) and the values of both indicators begin to decrease sharply (Picture 35).

 
Source: data of the National Statistic Bureau and Ministry of Health and Social Protection.

It is possible that there are certain differences in the rates of the reduction of economic activity and employment of men and women at earliest pension ages, that could be conditioned by greater expectations of performing the role of “breadwinner” by men and the role of “grandmothers” – by women (the legitimacy of this hypothesis is demonstrated by the corresponding data on other CIS countries), but unfortunately the official statistic data are aggregated by greater age intervals and, correspondingly, do not allow now to confirm or reject this hypothesis.

The changes in the quality of men and women employment, occurring after the able-bodied age are very indicative.

First of all the achievement of pension age is accompanied by the reduction of the size and level of employment of both sexes and the reduction of employment of men and women mainly in the formal sector of economy, while the employment in the informal sector is reduced insignificantly (Picture 36). So according to the data for 2003 year at pre-pension and early pension age (50-64 years) both for men and women the employment in the formal sector prevailed (in this sector worked 69% of all employed men and 61,5% of all employed women). As for women, the size and level of employment in the informal sector were higher than men’s. At pension age (aged 65 and over) the number of men, employed in the formal sector was lower by 14 times than the number of men aged 50-64 employed in this sector and the number of women – by 21 times. While the number of both men and women employed in the informal sector at these ages differ only by 2,3 (!) times. As result at the age of “65 and over” the correlation of employed in the formal and informal sectors is changing in the opposite (for the age between 50-64): only 27% of employed men and 14% of employed women remain to work in the formal sector at this age. The size and level of women’s employment in the informal sector are higher than men’s.

 
Source: data of the National Statistic Bureau and Ministry of Health and Social Protection.

It is interesting that the reduction of the informal employment of men and women is the result of the reduction of their informal employment at enterprises of the formal sector of the economy. In 2004 on the enterprises of the formal sector 13,4-13,5% of workers aged 50-64 were employed on the informal basis, while among workers aged 65 and over – nobody.

With age the lower is the number of those who is employed at informal enterprises. While the number of employed in households, producing goods for their own consumption (taking into account the natural decrease of the contingent), is changing insignificantly.

The activities, carried out by the workers of the studied age groups, also differ significantly. At the age of 50-64 both men and women are involved in all kinds of activities, defined by labor statistics, however the women and men are employed mainly in the agricultural sector (correspondingly, 47,2% and 46,8% of all employed women and men of this age), “public administration, education, health and social services” (24,4% and 13,1%) and also in industry (13,6% of employed men) that corresponds to the general structure of population employment by kinds of activities. At the same time the employment of those aged “65 and over” is concentrated exclusively in agriculture (correspondingly, 94,5% and 88,8% of all employed women and men of this age). An insignificant part of these pensioners is employed in “public administration, education, health and social services” – 6,9% of men and 5,5% of women (in the fields where the state share is great and the wages are low).

With age the structure of employment status of men and women is changed crucially (Picture 37). If at the age of 50-64 the majority of employed worked as hired workers (65% and 58% of all employed men and women at this age), 34% and 38% of men and women were considered self-employed and 0,7% of men and 0,3% of women were employers, the employment status of those aged 65 and over was different. Firstly, there are no employers among older people. Moreover, there are almost no hired workers among older people (only 14% of employed men and 9% of employed women of this age work as hired workers). The main employment status of the workers of this age is self-employment (86% of all employed men and women).

     
Source: data of the National Statistic Bureau and Ministry of Health and Social Protection.

Conclusions

The differences in the life expectancy of men and women, as well as gender differentiation of the retirement age, set in the Republic of Moldova, lead to a great gender asymmetry of pensioners’ structure. Now the gender differentiation of the size of old-age pension insurance is not great. At the same time the existence of gender differences in the size of pensions is very important, since the level of pension insurance is very low, while for the majority of old people the pension is the only source of income. The old people (both men and women) have a sharp need in paid work, the level of their economic activity and employment is quite high, but the employment quality is low. This demonstrates that in future by continuing the increase of the retirement age, this process should be accompanied by the realization of actions for the extension of possibilities for the employment of pre-pension age people.


1. Women and men in the Republic of Moldova. Statistical collection. – Statistica Moldovei, UNDP, 2005.

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