Why Women Leave Earlier: What Is Behind the Earlier Labour Market Exit of Women in the Czech Republic

Abstract

The article examines the factors that intervene in decisions to leave the labour market in the Czech Republic from a gender perspective. It uses binary logistic regression to identify the variables that predict the economic inactivity of men and women at the age of 60 plus and the interactions of variables to examine whether the factors that determine when people exit the labour market are the same for men and women. The analysis uses data from the Labour Force Study (LFS) collected in the fourth quarter of 2017 and focuses on people between the ages of 60 and 69 and five independent variables: gender, education, pension eligibility, marital status, and type of job. It studies how gender intersects with other characteristics in the decision to retire from the labour market. Although pension eligibility is the central predictor of economic inactivity after the age of 60, when eligibility is controlled for here, it is evident that gender, education, job type, and marital status all influence the timing of labour market exits. Women leave work earlier than men, and this is found to be true even when we control for their education or pension eligibility. They are also more likely than men to leave work even if they are not yet eligible to collect a pension. The effect of education is not as straightforward for women as for men: women with the lowest and with the highest levels of education are more likely to continue to work than men with the same educational attainment. Policies to prolong people’s working lives may thus have a different impact on each gender. keywords: retirement, pension, gender, ageing, extended working lives Sociologický časopis/Czech Sociological Review, 2022, Vol. 58, No. 3: https://doi.org/10.13060/csr.2022.014 * This text was published with the support of the project ‘Dynamics of Accumulated Inequalities for Seniors in Employment’, (Acronym: DAISIE), funded by EU NORFACE programme Dynamics of Inequality Across the Life-course (DIAL), project no. 462-16-113. This article was written with the support of grant project no. 21-08447S of the Czech Science Foundation titled ‘Digitalisation on the Labour Market: Challenges, Opportunities and Inequalities for Older Workers’. ** Address all correspondence to: Radka Dudová and Kristýna Pospíšilová, Institute of Sociology of the Czech Academy of Sciences, Jilská 1, 110 00 Prague 1, Czech Republic, e-mail: radka.dudova@soc.cas.cz, kristyna.pospisilova@soc.cas.cz. Sociologický časopis/Czech Sociological Review, 2022, Vol. 58, No. 3 2 The Czech Republic, together with all the countries of Europe and North America, is experiencing rapid demographic ageing. Declining fertility, which leads to a shrinking working-age population, and rising life expectancy are resulting in a growing imbalance between the proportion of the population who are collecting a pension and the proportion who are paying into the pension system. Older people are being repositioned in the public discourse as a ‘dependent group’ [Biggs and Powell 2001], and individuals are expected to manage their own risks by managing their pensions themselves [see Powel and Paul Taylor 2016]. In recent decades, population ageing has caused the most developed nations to recognise the need to promote longer working lives. Most countries have shifted their policies towards the concept of ‘active ageing’ [Axelrad and Mcnamara 2018; Moore 2001]. Although ‘active ageing’ is a multidimensional concept, it is often reduced to ‘working longer’ [Walker 2006]. On the macro level, the labour market participation rates of older workers have risen in many countries, including the Czech Republic. In many cases, however, these changes have led to an increase in the risks people are facing. There may be negative financial implications for those who, for various reasons, cannot work longer [Powell and Taylor 2016]. As a consequence, old age poverty will probably increase because of persistent or even growing labour market inequalities at the time of transition to retirement [Schilling 2016]. In the Czech Republic, the proportion of seniors at risk of poverty is rising: whereas 8.1% of persons aged 65 and over were at risk of poverty compared to 9.7% of the total population in 2016, this was 16.6% of seniors and 10.1% of the overall population in 2019 [CZSO 2020]. Some categories of older people are more at risk than others – especially older women and persons living alone [Rašticová, Bédiová and Žiaran 2018]. Because of the way social security systems in European countries like the Czech Republic are set up, (extended) employment is one of the most important factors protecting people from significant loss of income and poverty. It protects them both directly – delivering (extra) income and allowing for savings – and indirectly – as the number of years of contributions plays a role in the amount of benefits received in most pension systems. However, certain groups are less able or less willing to continue to work at an older age. In many countries, there are significant gender differences in retirement timing and economic activity in later age. According to some authors, the policies of extending working lives may be detrimental to women [König 2017; Léime and Street 2017; Radl 2012]. In the Czech Republic in 2018, the average age of people exiting the labour market was 63.2 years for men and 61.3 years for women [OECD 2019]. Reaching the statutory retirement age is the most common reason for leaving the labour market. The difference between the retirement age of men and women can be explained by the lower age at which women are entitled to draw a state pension; the gap has been gradually closing with every cohort as the statutory retirement age of women has been rising faster than that of men. Although other individual characteristics, such as education, health, or job satisfaction, mediate the effect