Emancipation has not yet happened in financial life

“Emancipation has not yet happened in financial life”

By Michael Bachner

March 5, 2024

Women earn 18.4% less than men. in social security the difference is 41.1%. Outdated models are also partly to blame

The 113th Women's Day (Friday) has not lost its significance, as women still earn significantly less. This continues throughout life, with a huge disparity in pensions and more frequent poverty in old age.

The income gap between women and men is narrowing, but it is closing very slowly and is above average in Austria compared to the EU.

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In 2012, the so-called “gender pay gap” was 22.9 percent (measured in terms of gross hourly wages, i.e. including the higher proportion of part-time work for women). In 2022 (latest EU comparative data), the gender pay gap was still 18.4 percent, an improvement of 0.4 percentage points compared to the previous year. The EU average is 12.7 percent.

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Two bankers pointed out this data on Tuesday. Gerda Holzinger-Burgstaller, CEO of Erste Bank Oesterreich, says: “The fact that gender parity is progressing so slowly makes it clear that women have no time to waste and should take their finances into their own hands.” Stefanie Christina Huber, President of the Austrian Association of Savings Banks, says: “Emancipation has not yet occurred in financial life.”

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Women are more likely to work in lower-paying industries and management positions are more often held by men. Unpaid “care work”, i.e. raising children or looking after the elderly, is also carried out much more frequently by women. In total, the difference in pensions between women and men at the end of working life amounts to 41.1 percent. Women are therefore 50 percent more likely to be affected by poverty in old age than men.

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Bankers particularly highlighted a factor that was rarely mentioned. Outdated models could also be partly to blame. When it comes to daily expenses or allowances, women feel responsible; When it comes to insurance or loans, it is still the man's responsibility. This emerges from an integral research presented by Holzinger-Burgstaller and Huber.

This distribution of roles also has an impact on savings behavior. Although savings accounts are equally popular among women (63 percent) and men (61 percent), significantly more men (45 percent) use alternative forms of investment, such as bonds, for pension provision than women (30 percent). But gold (19 to 13 percent) and cryptocurrencies (11 to 4 percent) are also more sought after among men. “The income gap also plays a role here. “If you have more at your disposal, you can invest in a more diversified way,” says Holzinger-Burgstaller.

She also sees findings like these as a mandate for banks to take action, for example, to help increase women's financial literacy. After all, planning for retirement is worth it even with small savings. Currently, 13% of women in Austria say they have a lot or a lot of knowledge about financial topics. However, 35 percent of men have this self-assessment.