Eastern women receive €357 more in pension benefits compared to their counterparts in the west.
In a striking revelation, women in western Germany are receiving lower pensions compared to their counterparts in eastern Germany. The primary reason for this disparity is rooted in differences in labor market participation, employment history, and structural factors stemming from Germany's historical division.
Key factors contributing to this gap include employment patterns, the pension system and reforms, gender roles, and career interruptions. Women in eastern Germany historically had higher full-time employment rates, often with longer and more continuous careers in the workforce. In contrast, women in western Germany more frequently worked part-time or had interrupted careers due to caregiving or other family responsibilities, leading to lower lifetime earnings and thus lower pension entitlements.
The reunification brought pension system adjustments that affected eastern German women differently. Despite facing higher unemployment rates at ages 60-62 compared to western Germany, eastern German women typically accrued better pension rights due to their more consistent work histories under the former East German system.
Persistent gender norms in western Germany lead to more frequent career breaks for childcare or eldercare, part-time work, and fewer promotion opportunities. These factors significantly reduce contributions to pension schemes, resulting in lower retirement incomes for women in the west.
Because eastern German women had fuller employment trajectories, their pensions reflect higher entitlements compared to western counterparts who often face penalties due to interrupted or part-time careers. This results in lower average pensions for western German women despite sometimes similar demographic and economic conditions today.
In terms of average pensions, men in the old states receive an average pension that is two-thirds higher than women. The Bottrop district in the Ruhr area has the highest average monthly pension for men in the country, while the district of Waldshut in the Black Forest has a lower average monthly pension for men than the average women's pension in some eastern German states.
The difference in pension amounts is due to women in the old federal states taking longer career breaks due to family. The lowest average monthly pension for a woman is in the Rhineland-Palatinate Eifel district of Bitburg-Prüm, at 668 euros. Male pensioners in the Ruhr area have average pensions that are higher than the average women's pensions in Brandenburg, Saxony, and Mecklenburg-Western Pomerania.
In eastern German states, the average monthly pension for a woman is more than 1,100 euros. On average, a woman in the east receives 357 euros more than in the west per month. The district of Waldshut in the Black Forest has the lowest average monthly pension for men in the country, at 1,201 euros.
Among men, the difference in average monthly pensions between eastern and western German states is minimal, with the east having a slightly higher average of 1,416 euros and the west having 1,430 euros. The Prognos Institute and the German Insurance Association (GDV) calculated these averages.
In the eastern German states, the employment rate of women has historically been higher. The employment rate of men in the east is not significantly different from that in the west. Women in Potsdam receive the highest average monthly pension nationwide, at 1,314 euros.
This disparity underscores the need for policy interventions to address the root causes and promote gender equality in retirement income. The differences in employment patterns, pension systems, and gender roles must be carefully considered to ensure a fair and equitable pension system for all.
- The gap in pension entitlements between women in eastern and western Germany is linked to differences in personal-finance, as women in the west often have lower lifetime earnings due to more frequent part-time work and career interruptions.
- Science and health-and-wellness are intermingled in the context of this disparity, as persistent gender norms in western Germany lead to more girls taking longer career breaks for family responsibilities, affecting their physical and financial well-being in retirement.
- Business and finance intersect in shaping the pension disparity, as reforms in the pension system have favored those with consistent work histories, providing higher pension rights to women from eastern Germany due to their higher full-time employment rates.
