{"id":9146,"date":"2025-06-13T15:13:37","date_gmt":"2025-06-13T13:13:37","guid":{"rendered":"https:\/\/www.rivistaeco.com\/?p=9146"},"modified":"2025-06-13T15:17:29","modified_gmt":"2025-06-13T13:17:29","slug":"early-retirement-is-a-trap-for-women","status":"publish","type":"post","link":"https:\/\/www.rivistaeco.com\/en\/2025\/06\/13\/early-retirement-is-a-trap-for-women\/","title":{"rendered":"Early Retirement Is a Trap for Women"},"content":{"rendered":"<p><em>Gender disparities do not end in the labor market. They persist into retirement. Women\u2019s pensions are in fact lower than men\u2019s. This is to be expected under the contribution-based system, given that women tend to have more fragmented careers, rarely reach managerial positions, are more often employed part-time, and consistently earn lower wages than their male colleagues. Even decisions about whether and when to retire are influenced by factors beyond financial ones. As a result, many women opt for early retirement even at the cost of significantly reduced income\u2014sometimes risking poverty in old age. Awareness campaigns are needed to help women plan their financial futures after leaving the workforce.<\/em><\/p>\n<p>&nbsp;<\/p>\n<p>Italy spends 16% of its GDP on pensions\u2014one of the highest shares in Europe. This raises a crucial question: how do individuals decide when to retire, and how can we ensure a decent standard of living in the face of increasing life expectancy?<\/p>\n<p>In this context, the difference in pension amounts between men and women becomes particularly important. In 2023, out of 16.2 million retirees in Italy, 7.8 million were men and 8.4 million were women, according to INPS data. Women are therefore the majority, but the average monthly pension income received by men is about 27% higher than that received by women. The gap rises to 28% when considering only work-related pensions (early retirement, old-age, and disability pensions). In monetary terms: men receive an average pension of \u20ac1,674, compared to \u20ac1,208 for women.<\/p>\n<h3><strong>How the Italian Pension System Works<\/strong><\/h3>\n<p>Italy has a pay-as-you-go pension system, where current workers\u2019 contributions fund the benefits of those already retired. There are also, though rarely, capitalization systems in which workers\u2019 contributions accrue returns over time until retirement.<\/p>\n<p>As life expectancy increases, the sustainability of the pay-as-you-go system comes under pressure (see also the article by Carlo Favero in this issue, ed.). This is why, starting in the 1990s, several reforms were introduced in Italy to raise the minimum retirement age.<\/p>\n<p>Until 2011, women could retire earlier than men. Then the Monti-Fornero reform gradually raised the retirement age for both sexes, equalizing it from 2018 onward. Today, both men and women can retire with an old-age pension at age 67 with 20 years of contributions. Alternatively, they can retire early with 42 years of contributions, regardless of age.<\/p>\n<p>Until 1992, pension benefits were calculated using the earnings-based system, based on salaries earned in the last five to ten years of one\u2019s career. Then, with the Amato reform and three years later the Dini reform, a \u201cmixed\u201d system was introduced from 1996 for those already working at that time, and a fully contribution-based system for those entering the workforce from that year onward. Under the contribution-based system, the pension is calculated based on wages earned throughout the entire career.<\/p>\n<h3><strong>Men\u2019s and Women\u2019s Labor Markets<\/strong><\/h3>\n<p>Given these retirement rules, where does the gap between men\u2019s and women\u2019s pensions come from? It stems from gender differences in labor market participation, career paths, and wages.<\/p>\n<p>According to the 2024 Labor Force Survey, the male labor force participation rate is 71.1%, while only 53.3% of women aged 15\u201364 are employed. The chart below shows that the gender gap in participation increases significantly with age, reaching around 20 percentage points for the 55\u201364 age group.<\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-9147 size-large\" src=\"https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli-1024x422.png\" alt=\"\" width=\"640\" height=\"264\" srcset=\"https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli-1024x422.png 1024w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli-300x124.png 300w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli-768x316.png 768w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli-1536x633.png 1536w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli-600x247.png 600w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli.png 2008w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><\/p>\n<p>&nbsp;<\/p>\n<p>However, even when women do work, significant differences in careers and wages persist. Men\u2019s careers tend to be longer and more continuous, while women\u2019s are shorter and more fragmented, mainly due to interruptions for childbirth and unpaid caregiving.<\/p>\n<p>According to 2023 Labor Force Survey data, 31% of women work part-time, compared to just 6% of men. This disparity affects eligibility for early retirement, which requires 42 years of contributions\u2014easier for men to reach. Women are more likely to retire with an old-age pension, which requires only 20 years of contributions.<\/p>\n<p>In both public and private sectors, women face more difficulty reaching top positions. According to the 2024 INPS Gender Gap Report, in the private sector (excluding agriculture), fewer than 0.5% of women hold managerial roles, compared to 1.3% of men.<\/p>\n<p>Women also systematically earn less than men, and the gap widens with age, as shown in the chart below. This raw figure does not account for different sectors, but it\u2019s worth noting that women tend to work in lower-paying sectors\u2014explaining part of the gap. Still, the wage gap persists even within the same sector.<\/p>\n<p>If women earn less throughout their careers, their pensions will inevitably be lower\u2014especially under the contribution-based system. This system may therefore disadvantage women, who have more frequent labor market interruptions than men. Lower wages and shorter careers lead to lower pensions, increasing women\u2019s risk of financial hardship and economic vulnerability in old age.<\/p>\n<p>&nbsp;<\/p>\n<figure id=\"attachment_9149\" aria-describedby=\"caption-attachment-9149\" style=\"width: 640px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-9149 size-large\" src=\"https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli2-1024x422.png\" alt=\"\" width=\"640\" height=\"264\" srcset=\"https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli2-1024x422.png 1024w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli2-300x124.png 300w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli2-768x316.png 768w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli2-1536x633.png 1536w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli2-600x247.png 600w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli2.png 2008w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><figcaption id=\"caption-attachment-9149\" class=\"wp-caption-text\">Note: The unadjusted gender pay gap is defined as the difference between men\u2019s and women\u2019s gross hourly wages, expressed as a percentage of men\u2019s gross hourly wages. Source: INPS Gender Gap Report 2024.<\/figcaption><\/figure>\n<p>&nbsp;<\/p>\n<h3><strong>The Cost of Retiring Under \u201cOpzione Donna\u201d<\/strong><\/h3>\n<p>Another crucial issue is the decision of when to leave the workforce.<\/p>\n<p>Beyond early retirement\u2014which is difficult to access due to the 42 years of contributions required\u2014and old-age retirement\u2014which requires reaching a certain age with 20 years of contributions\u2014there is a third option available only to women: \u201cOpzione Donna.\u201d Introduced in 2008, it allows women to retire from age 57 (now raised to 60) with at least 35 years of contributions, provided the pension is calculated entirely under the contribution-based system.<\/p>\n<p>In a recent study, we examined whether the Monti-Fornero reform of 2011, which raised the retirement age, influenced women\u2019s decisions to use \u201cOpzione Donna,\u201d and whether this had consequences for pension amounts.<\/p>\n<p>The law gradually increased the retirement age. For the first cohort affected by the reform\u2014women born in 1952, who turned 60 in 2012\u2014it rose from 60 to 64. From the 1953 cohort onward, the retirement age became 67.<\/p>\n<p>Before the reform, the eligibility ages for \u201cOpzione Donna\u201d (57) and standard retirement (60) were close. Afterward, \u201cOpzione Donna\u201d allowed retirement much earlier\u201457 instead of 64 or 67\u2014making it a more attractive option. Indeed, its use increased significantly from 2012, following the Monti-Fornero reform.<\/p>\n<p>However, \u201cOpzione Donna\u201d requires pension benefits to be calculated entirely under the contribution-based system, resulting in a substantial reduction in pension amounts\u2014especially for early cohorts affected by the reform, who would otherwise have benefited from the earnings-based or mixed systems.<\/p>\n<p>According to the 15th INPS Report (2016), choosing \u201cOpzione Donna\u201d can reduce pension amounts by up to 35% compared to waiting for standard retirement.<\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-9151 size-large\" src=\"https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli3-1024x349.png\" alt=\"\" width=\"640\" height=\"218\" srcset=\"https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli3-1024x349.png 1024w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli3-300x102.png 300w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli3-768x262.png 768w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli3-1536x524.png 1536w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli3-600x205.png 600w, https:\/\/www.rivistaeco.com\/wp-content\/uploads\/sites\/2\/2025\/06\/ENG_Bassoli-Brilli3.png 2008w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><\/p>\n<p>&nbsp;<\/p>\n<p>In our analysis, we compared the cohort of women born in 1952 (the first affected by the increased retirement age) with those born in 1951 (not subject to the new rules). We focused on women who had accumulated around 35 years of contributions by age 60, distinguishing between those eligible for \u201cOpzione Donna\u201d (with more than 35 years of contributions) and those who were not, and thus had to wait until the standard retirement age set by the reform.<\/p>\n<p>We found that women affected by the Monti-Fornero reform\u2014whose retirement age rose from 60 to 64\u2014opted to retire earlier using \u201cOpzione Donna,\u201d provided they had sufficient contributions, even if the advance was only by a few months. This choice, however, had financial consequences: calculating the pension under the contribution-based method, as required by the measure, resulted in about a 5% reduction in benefits\u2014equivalent to \u20ac900 per year.<\/p>\n<h3><strong>How to Promote Informed Decisions<\/strong><\/h3>\n<p>This analysis, along with available data, shows how the current pension system and retirement access reforms may exacerbate pension disparities between men and women. It also shows that women\u2019s retirement decisions are not based solely on monetary factors. However, these choices expose them to a higher risk of poverty in old age.<\/p>\n<p>To prevent this, policies aimed at raising awareness and supporting retirement planning are essential. Active labor market policies to encourage female employment have already been implemented. Now, information tools are needed to ensure informed decisions about when to exit the labor market.<\/p>\n<p>&nbsp;<\/p>\n<p><em>Elena Bassoli is a researcher at ETH Zurich. Her research focuses on aging economics, health economics, and gender disparities.<\/em><\/p>\n<p><em>Ylenia Brilli is a professor in the Department of Economics at Ca\u2019 Foscari University of Venice. Her research interests include family economics, health economics, and labor economics.<\/em><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Gender disparities do not end in the labor market. They persist into retirement. Women\u2019s pensions are in fact lower than men\u2019s. This is to be [&hellip;]<\/p>\n","protected":false},"author":12984,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"coauthors":[333,334],"class_list":["post-9146","post","type-post","status-publish","format-standard","hentry","category-non-categorizzato"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Early Retirement Is a Trap for Women - Rivista Eco<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.rivistaeco.com\/en\/2025\/06\/13\/early-retirement-is-a-trap-for-women\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Early Retirement Is a Trap for Women - Rivista Eco\" \/>\n<meta property=\"og:description\" content=\"Gender disparities do not end in the labor market. 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