Different Economic Effects of Part-Time Work for Women and Men

In Denmark and Norway, a few years of part-time work when the kids are small will not have a noticeable effect on a person’s pension. In Iceland, Sweden and Finland, however, it may make more of a difference. This is the conclusion of a new report from NIKK.

NIKK, Nordic Information on Gender, has been commissioned by the Nordic Council of Ministers to review part-time work in the Nordic countries. A first report explores how part-time work may have different economic effects for women and men. The report titled Part-Time Work, Gender and Economic Distribution in the Nordic Countries was authored by researchers Marianne Sundström and Alma Wennemo Lanninger.

In the Nordic countries, more women than men work part time. The difference is similar in all Nordic countries except Finland. Norway has the largest proportion of women working part time; 36 per cent of all working 25-64-year-old women worked part time in 2012. In Denmark, the share was 29 per cent, in Sweden 31 per cent, in Iceland 26 per cent and in Finland 15 per cent.

Nordic men display significantly smaller differences. Part-time work remains unusual, with Norway having the highest rate and Iceland the lowest.

The rates of involuntary part-time work – which occurs when a part-time worker would rather work full time – vary significantly among the Nordic countries, with Finland and Iceland having the highest rates and Denmark the lowest. When unemployment rates go up, so do rates of involuntary part-time work. This was particularly evident in connection with the financial crises in 2008 and the 1990s.

How are pensions affected?

The researchers estimated the effects of part-time work on a person’s pension based on four standardised cases:

• A woman who spends her entire working life working full-time as an assistant nurse.

• A woman who works as an assistant nurse her entire working life, but who works only part-time (75 per cent) for ten years.

• A woman who spends her entire working life working full-time as an elementary school teacher.

• A woman who works as an elementary school teacher her entire working life, but who works only part-time (75 per cent) for ten years.

All women were born in 1975 and have two children.

For Denmark and Norway, the results show small difference in future pension between full-time and part-time work. The studied part-time workers end up with 98-99 per cent of the full-time workers’ pensions. The reason for the small difference is that the studied part-time women still work full time for most of their working lives, which has a stronger impact in the Danish and Norwegian pension systems than the ten years of part-time work. In addition, the pension systems provide compensation for time home with children. In Denmark, there is also a built-in compensation for low incomes. However, if the women were to work part time for longer than ten years, there would be a larger effect on their pensions.

In Finland, Iceland and Sweden, the studied part-time workers can count on 4-6 per cent lower pensions than their full-time counterparts. In these countries, there is a stronger link between pensions and the total number of hours worked before retiring.

For more information please contact:

Bosse Parbring, project coordinator at NIKK
E-mail bosse.parbring@genus.se
Tel. +46 31 7869230

Marianne Sundström, professor at Stockholm University
E-mail marianne.sundstrom@sofi.su.se
Tel. +46 8 163136

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