October 1st marked the UN International Day of Older Persons (UNIDOP), with this year’s theme being “The Resilience and Contributions of Older Women”. Indeed, the contributions of women and older women are often overlooked and undervalued in society. One indicator of this is the increased risk of older women aging in poverty compared to older men.
In Canada, the prevalence of women who are 75 years old and over and living with low-income status was 21% compared to 13.9% of men in the same age group (Statistics Canada, 2020). Further to this, Canada’s Gender Pension Gap (GPG) was observed at 18%[i] in 2020 (Statistics Canada). In other words, for every $1 an older man received in retirement income, an older woman received $0.82. While the gap has fluctuated over the decades, it has ultimately increased by three percent from 15% in 1976 (earliest available data) to 18% in 2020.
Data source: Statistics Canada. Table 11-10-0239-01 Income of individuals by age group, sex and income source, Canada, provinces and selected census metropolitan areas
What is the Gender Pension Gap?
The GPG is the difference between retirement income received by men and retirement income received by women. All around the world, women are receiving smaller pensions than men and Canada is no exception. Similar to many developed countries in the world, the amount one receives from their pension in Canada is heavily dependent on their financial contributions to their pension plan over the course of their working life, with a smaller amount being paid by a state social pension.
Drivers of the Gender Pension Gap
As a largely contributory system, it perhaps comes as no surprise that women in Canada retire with a smaller pension than men as women are more likely to work fewer years than men over the course of their careers as they exit the labour force (either temporarily or permanently) after having children, are more likely to work part-time, and generally earn lower wages than men (what is referred to as the gender wage gap). The GPG can therefore be seen as one of the compounded impacts that the gender wage gap has on women’s long-term economic well-being.
Deeply-seated gender norms still expect women to perform the majority of unpaid domestic work. Women’s dominant role in performing unpaid work limits their ability to participate in full-time paid work, therefore limiting their earnings potential and retirement income. Women’s unpaid labour is critical to the functioning and overall health of the Canadian economy and yet, women’s contributions continue to be under-valued and underpaid, including in Canada’s pension system. As the system mostly compensates those who engage in paid labour, women’s domestic labour is largely ignored and results in women experiencing lower quality retirement (or even poverty) in old age.
As the world commemorates UNIDOP this month, there is no better time to call attention to not only the contributions of women around the world but the need for equal pay, better social protections, and shared domestic work between men and women.
For an in-depth analysis of the Gender Pension Gap, visit https://payequity.gov.on.ca/en/learnmore/pages/gender-pension-gap.aspx
[i] When calculating the difference in income received from Old Age Security and Guaranteed Income Supplement, Canada Pension Plan/Quebec Pension Plan, and Private Retirement Income