PROJECT OVERVIEW

Gender Differences in Access to Employer-Sponsored Benefits
Jeannette Rogowski and Lynn Karoly

Since World War II the labor force participation of women has risen dramatically. This project addresses gender gaps in access to employment-based retirement benefits, considering both health insurance and pensions. Women have different labor force histories than men, often interrupting careers to care for children. Many have worked at lower-paying jobs with less generous fringe benefits. Thus, differences in access to these benefits are to be expected.

Using data from the 1992 Health and Retirement Study, Rogowski and Karoly find that near-elderly women (aged 51 to 61) are twice as likely to lack pension benefits through their own work histories compared with their male counterparts. Half of all women on the verge of retirement lack access to retirement income from their own employment-based pensions. Three quarters also lack access to employment-based retiree health insurance from their own current or former employers, a rate that is fifty percent higher than the rate for men. Near-elderly women are thus vulnerable to facing their retirement years with limited resources of their own.

The gender gap in access to employment-based benefits is substantially reduced, however, when the resources available to households are taken into consideration. When pension benefits from a spouse are factored in, the access gap in pensions for women is cut in half, from half to one quarter of near-elderly women lacking access to these benefits. Similarly, the access gap for retiree health insurance is also reduced, from three quarters to half of near-elderly women lacking access to these retirement benefits. Nonetheless, women rely heavily on their husbands for access to retiree health insurance benefits. One quarter of women rely exclusively on their husbands for these benefits compared to only one in twenty men who rely exclusively on their wives.

Marital disruptions, however, can jeopardize access to employment-based benefits that are derived from spouses. Data from the HRS demonstrates that marital disruptions decrease access to employer-sponsored retirement benefits and have a greater effect on women than men. For retiree health insurance, a marital disruption due to divorce raises the rate at which near elderly women lack retiree health insurance. Compared to women who have had intact marriages, those who have ever been divorced are 11 percentage points less likely to have access to retiree health insurance. Similarly, a marital disruption due to widowhood raises the rate at which women lack these benefits by 14 percentage points. In contrast, the presence of a divorce raises the rate at which men lack retiree health insurance by 9 percentage points, a drop that is somewhat smaller than for women. Widowhood also reduces access to retiree health insurance for men, but at a lower rate than for women (10 percentage points).

Gender differences are also evident in the effect of marital disruptions on access to pension benefits. Compared to women who have been in intact marriages, those who have been ever divorced are 13 percentage points less likely to have access to pension benefits. For men, the differential is less than half as large, 5 percentage points. For widowhood, the gender differences are even larger. Among women, widowhood results in an increase of 26 percentage points in the likelihood of not being covered by a pension. For men, the differential is less than a fifth as large, 5 percentage points. Thus, marital disruptions have larger effects on reducing access to both employer sponsored pension and retiree health benefits among women than men. This is due to the fact that men have different types of jobs than women with longer job tenures and higher earnings, and are thus more able to rely on their own pension and retiree health benefits in the case a marriage ends due to divorce or death.