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Legislation Publications Pension models About project Statistics

INTRODUCTION

CHAPTER I. Overview of gender issues in pension systems from different countries
1.1. Pension system reform and gender equality issues
1.2. European Union countries with a developed „social state”
1.3. Post-socialistic countries

CHAPTER 2. Gender analysis of pension and labor legislation of the Republic of Moldova
2.1. International labor standards and national legislation of the Republic of Moldova
2.2. Legal insurance of equal access to labor and professional occupations: employment guarantees
2.3. Right to free choice of profession, professional training and retraining, professional promotion. Restrictions related to women’s work
2.4. Equal remuneration for the work of equal value
2.5. Right to healthy and safe working conditions. Guarantees and privileges for pregnancy and maternity
2.6. Right to social insurance including right to pension

CHAPTER 3. Analysis of demographic context of gender issues in the Republic of Moldova
3.1. Gender asymmetry of sex/age structure of the population of the Republic of Moldova
3.2. Differences in conditions and causes of mortality of men and women, men’s over mortality rate
3.3. Gender discrepancy of the indexes of life expectancy in Moldova and their dynamics
3.4. Life expectancy on pension
3.5. Gender differences in the correlation between the duration of the working life and life on pension
3.6. Impact of birthrate on the workers length of insured service

CHAPTER 4. Labor market of the Republic of Moldova and its impact on the trends of pension system reform: gender aspects
4.1. Economic activity, employment and unemployment
4.2. Employment by economic sectors

CHAPTER 5. Salaries and incomes

CHAPTER 6. Informal employment

CHAPTER 7. Issues of social breaks in employment

CHAPTER 8. Gender issues of current pensioners
8.1. Gender structure of pensioners

CHAPTER 9. Forecast of the specifics of pension insurance of men and women, pension transfers between sexes in the established pension system

CHAPTER 10. Gender analysis of the formulas for old-age pension calculation
10.1. Analysis of old pension formula for calculation of old-age pension
10.2. Analysis of the new pension formula for calculation of old-age pension
10.3. Change of gender discrepancy in pensions in the transition to the new pension formula

CHAPTER 11. Increase of the retirement age. Equalizing the retirement age?
11.1. Advantages and disadvantages of the retirement age increase and its “equalization” for men and women
11.2. Individual pension burden or correlation between the duration of the able-bodied age and duration of life on pension
11.3. Change of the probability of living until the retirement for men and women under different scenarios of the retirement age increase

CONCLUSIONS

BIBLIOGRAPHY




Gender aspects of the Republic of Moldova’s pension system

CONCLUSIONS

  1. Now the current pension system of the Republic of Moldova is characterized by a range of gender problems and asymmetries, as result of partial differentiation for men and women of pension schemes and rules, as well as result of different status of men and women in the labor and family spheres. According to the analysis, the part of gender problems, specific to Moldovan pension system, were also characteristic for other pension systems from some countries of the European Union, Central Eastern Europe and CIS. This points out to the possibility of applying the positive experience of these countries in undertaking measures, capable of reducing the consequences of gender inequality for old people. It is about the equalizing of the retirement age for men and women, creation of a fair algorithm of pension calculation, improvement of the record of non-insured periods and expansion of the list of additional social guarantees, granted depending on the period on pension.
  2. The analysis of the standards of the current labor and pension legislation of the Republic of Moldova allowed to conclude that the legal reforms, implemented by the state, are aimed at bringing the national laws in accordance with international legal standards of the European Union and applying in the legal practice of the basic international principles and legal values, including the principle of gender equality. As other new states from the post-soviet space, Moldova applies the democratic values in all spheres of economic, political and cultural life and aspires to create the required legal framework for ensuring to citizens equal rights and opportunities in the labor sphere and labor-related relations, including the right to pension and social insurance.

    On the whole the standards of the national legislation of the Republic of Moldova do not contain evident discriminative provisions, are gender neutral and quite correspond to international conception of gender equality. Certain standards of the labor and pension laws envisage special guarantees and privileges for women, persons with family responsibilities and are aimed at creation for them of most favorable conditions for combination of labor and family roles. Although there are no grounds to consider them discriminative from the point of view of international legal approaches, in practice they create certain difficulties for both the employer and employees, reducing their competitiveness on labor market. More often this is related to women, to whom the social role of “home keeper” is traditionally assigned, that is conditioned not only by their biological destination, but by established stereotypes and traditions. Therefore, the lack of discriminative standards de jure do not exclude the women’s discrimination de facto.
  3. The analysis of demographic processes in the Republic of Moldova showed that, as a rule, their change lead to the sharpening of gender issues. So in the recent years the life expectancy at birth increased gradually for both men and women (in 1981-2004 it increased in fact by 2 years for men and 3 years for women). However, at the same time the dynamics of the differences in the life expectancy of men and women was negative (in the given period the difference in the life expectancy at birth increased by one year, for those who lived till the age of 45 – by 1,6 years, for those who lived till 65 years – by 0,7 years) that leads to the growth of gender asymmetry of Moldovan pension system.

    The reduction of natality and increase of the life expectancy led to gradual population ageing and the female part of the population was and remains older than the male population. The gender asymmetry of the structure of old people in Moldova is significantly greater than its average world values. In 2004 1000 women aged 60 and older amounted for only 647 men of this age.

    The gender asymmetry of sex/age structure of Moldovan population is a direct consequence of the high mortality of able-bodied men (in 2004 the coefficient of the over mortality rate of men of this age amounted to 3). Higher indexes of men over mortality rate are the result of differences in traditional gender roles spread in the society.

    The calculations showed that in Moldova the men and women are characterized by different correlation between the life expectancy on pension and duration of the able-bodied age. For men this correlation is one of the lowest in the world – about 24%, which is a consequence of combination of low life expectancy on pension and quite high pension age. For women this correlation is significantly higher (41%), however it is lower than average international values. In this relation it is to be mentioned that the issue of further growth of pension age could be considered only in relation to equalizing based on sex.

    The reduction of natality, occurred in the country in the last years, shall lead in future to population ageing and, consequently, to the increase of pension burden on working population, from the one side, and shall reduce the impact of non-paid reproductive labor on women’s pension insurance, contributing to the reduction of gender asymmetry in this field, from the other side.

  4. A negative impact on the functioning of the Moldovan pension system have the processes, which take place on labor market and in the employment sphere. The reduction of the level of economic activity and employment of both men and women strengthens the economic burden on pension system in two ways. From the one side, the number of payers to pension fund is reduced and the pension burden on the means of the fund and current payers is increased. From the other side, if even this trend is broken  after some time, it shall have a negative impact on the amount of accumulations of future pension beneficiaries. Besides the dynamics of men’s and women’s employment in the recent years showed that firstly, though the changes in pension legislation led to employment stabilization at advanced ages, however they did not brake the stronger influence of the informal economy on the labor market, and secondly, the amendment of pension legislation as a tool for improving the behavior on labor market was more efficient for old generation than for the workers of early and middle ages. The reason consists not only in the forthcoming pension, but in lower mobility and competitiveness of the old generation of workers.

  5. The analysis of statistic data, characterizing the level of remuneration in the Republic of Moldova, showed that now the gender differences in the size of salaries are not so great that is probably explained by the general low remuneration rate in the country. The main factors, leading to differences in the remuneration of men and women are the horizontal and vertical segregations. The low remuneration rate in the country leads to the maintenance of low level of pension accumulations and pensions. The gender inequality is presented in two ways. From the one side, the lower is the level of wages, the lower is the pension level and there is the vulnerable situation of women-workers. From the other side, the lower is the level of wages under the solidarity system, the more probable is the redistribution of means from highly-paid workers to low paid, i.e. from men to women.

    In future with the growth of the remuneration level in the country it is possible the increase of gender differences in remuneration that shall lead, correspondingly, to the increase of gender differences in the size of pensions.

    Lower level of women’s remuneration compared to men’s is reflected on the level of their insurance at old age that cannot remain without the attention in the state of social the orientation.

  6. The statistic data show that now the informal employment in the Republic of Moldova is widely spread. Even according to official data its level constitutes 38%. On the whole the informal employment is spread equally among men and women. The gender differences are revealed in comparison with the “quality” of the informal employment. So the informal employment of men is related mainly to the activity of enterprises and organizations and is characterized by a great variety of labor spheres, while the women informal employment is mainly individualized (i.e. employment in natural households, and hired labor) and is concentrated in the agricultural sector, trade and services spheres.

    We hope that the implementation of market reforms, including growth of the remuneration level, as well as the improvement of the system of state labor market regulation, are capable to bring out of the shadow the main part of the informal employment. But it is obviously that firstly this shall happen at the account of those who are employed informally on formal enterprises and not in agricultural sector (which is more conservative and the economic relations in this sector can hardly be officialized). For the pension system this means that the terms and probability of increasing the number of payers to pension fund at the account of men, having informal wages in the country, are higher than the probability of this increase at the account of women.

  7. The analysis of the practice of using socially-useful breaks in employment showed that in general the women, as a social group, have now less possibilities for the formation of full length of insured service, required for old age pension granting. It is a question that their able-bodied age is lower than men’s, but also that they spend more time for education and taking care of small children. The women represent the majority among pupils of the high classes of secondary education schools, as well as among the students of colleges and high education institutions that as result support their competitiveness in the employment sphere.

    Besides now at child birth the women are often forced to leave the labor market for a long period of time. Due to insufficient development of the system of pre-school education institutions (only in 1991-2001 the share of children attending the pre-school institutions in % of the number of children of the corresponding age decreased from 66% to 38% in 2001; the day nurseries were affected most of all), the women are often forced to use fully not only the leave for taking care of a child up to 3, but also the leave for taking care of a child up to 6. This diminishes significantly the women’s possibilities for formation of their length of insured service. For the pension system, this means the reduction of the number of potential payers to pension fund.

    Now due to the lack of statistic data it is impossible to come to a conclusion about the asymmetric impact of unemployment on pension insurance of men and women.

  8. The differences in the life expectancy (particularly in the life expectancy on pension) of men and women, as well as gender differentiation of the retirement age, set in the Republic of Moldova, lead naturally to a great gender asymmetry of the structure of pensioners. Now the women represent in fact two thirds of all old age pensioners (in 2006 among beneficiaries of non-agricultural pensions they constituted 69,3% and among beneficiaries of agricultural pensions – 66,1%).

    According to the official statistic data now in the Republic of Moldova the gender differentiation of the size of old-age pension insurance is not so great (in 2006 among beneficiaries of agricultural pensions the average pension of the women constituted 93,2% out of the average pension of men and among beneficiaries of non-agricultural pensions – 85%). So now the pensions of men and women differ less than their wages that confirm considerable pension transfers between sexes, existing in the Moldovan pension system.

    However small are the current gender differences in the size of pension, their existence is important, since the level of pension insurance is quite low, while for the majority of old people in Moldova the pension is not only the basic, but, as a rule, the only source of income (for oldest – only this source). The current situation contributes to the poverty feminization among old people.
    The analysis of data on the issues of the employment of pre-pension and pension age persons allows making some quite interesting conclusions. Firstly, on the Moldovan labor market the level of economic activity and employment of pension age people (both men and women) remains quite high. This shows that the elderly persons have a sharp need in paid employment. Secondly, now the elderly persons are very limited in getting this paid work, since their employment quality is quite low. The marginality of old people employment is expressed in the fact that now for the pension age persons (both men and women) the most available working places are on the informal labor market (and only those at informal enterprises or individual households), and mainly in the agricultural sector and under self-employment conditions. In other words, the employment is socially unprotected and “invisible” from the point of view of pension insurance system. Such situation demonstrates that in future by continuing the increase of the retirement age, this process should be accompanied by actions for increasing the employment possibilities of pre-pension age people.

  9. The calculations showed that the pension formulas, used now in the pension system of the Republic of Moldova, form in a different way the gender asymmetry of pension insurance. The old pension formula “smoothes” the differences in the status of men and women in the employment field and on labor market that grades the gender-asymmetric use of socially useful breaks in the paid employment. In the calculation of pensions according to the new formula, the existing direct and indirect discrimination in the employment is transferred directly to pension insurance. As result the gradual transition of the calculation of pensions from the old to the new pension formula under all other equal conditions shall contribute to the increase of gender differences in pensions. And the increase of these differences shall be fluent only up to 2022 year, then it shall take place their uneven growth (that is related to complete transition of pension calculation according to the new formula), after that the situation shall stabilize.

    The gender discrepancy in pensions shall also increase due to lower length of insured service of women (compared to men’s length of service) that is mainly a consequence of gender-asymmetric use of socially-useful breaks in employment and gender differences in the education strategies. Thus, the lack of current mechanisms for record of socially-useful employment breaks in the length of insured service, insufficient development of pre-school institutions, as well as wide distribution of traditional gender roles come into conflict not only with the national education and demographic policy, but also with the long-term interests of pension system, restraining the growth of the birth rate in the country.

  10. As for the perspectives of the change of the retirement age and selection of the most acceptable strategy for this change, from our point of view (resulting from the specifics of the demographic development of the Republic of Moldova, and taking into account that the retirement age, differentiated by sex, is not profitable for women) the most real scenario of further increase of the retirement age in the country could be the increase of the retirement age only for women (equalizing the retirement age based on sex), accompanied by the improvement of the mechanism of ”smooth” increase of the retirement age both for women and men, aimed at stimulating as much as possible both of them to continue the professional activity and increase the age of actual pension request.

    In case of the adoption of the decision on equalizing the retirement age of men and women (resulting from the analysis, carried out in this report) is preferable to set this equalization at the age of 62. From all examined scenarios for the increase of the retirement age, this variant is characterized by minimal gender differences in the probability of living until the retirement and values of the coefficient of pension burden.
  11. The practical realization of this scenario shall require a considerable specific preparation. After all “the equalization” is in conflict with the wide-spread belief (formed and fixed in the soviet times) related to the necessity of keeping “the privileges” for working women, because they bear “a double working burden”. The population is still far from the understanding that the differentiated retirement age contributes to the strengthening of the stereotype about “the profession” of the women labor force that finally often plays against the women, decreasing their competitiveness on labor market. In future this differentiation shall also decrease the level of social insurance of women compared to men. Therefore, first of all it is important to carry out an explanatory campaign among population about those positive effects, which could occur due to the equalization of the retirement age for men and women. Then a special survey should be carried out in order to identify the readiness of population to such changes.
  12. The carried research showed that although the statistic base existing in the Republic of Moldova is developing quickly, it does not contain enough indicators, able to reflect adequately the issues of men and women on labor market, in the employment and pension insurance spheres. It is obvious that without the creation of a statistic base for studying the above-mentioned problems, it is impossible to develop and implement an effective gender policy and evaluate it efficiency.

The existence and difficulty of the considered gender problems in the Republic of Moldova points out to the necessity of developing and implementing concrete programs and activities:
In the framework of pension system:

  • to examine the issue of further increase of the retirement age only in relation to its equalizing based on sex.
  • to develop and apply in practice the mechanisms of actual record of socially-useful breaks in employment in the length of insured service.

Activities in those life spheres, which are directly related to pension system through the mechanisms of pension contributions collection and pension formation.

  • to popularize and encourage the healthy life first of all among male population.
  • to amend the labor legislation, ensuring anti-discriminative standards, guaranteeing not only equal rights, but also equal opportunities for women and men on employment, realization of labor activity, promotion and dismissal, including the right to partial employment for women, having children.
  • to create a mechanism for discrimination prevention and control over the observance of anti-discriminative standards of labor legislation.
  • to increase the status and prestigiousness of the work for taking care of children, stimulate the more uniform participation of men and women in carrying out these responsibilities and first of all more uniform use of the leave for taking care of a small child.
  • to increase the remuneration level in budget sectors (firstly in health and education) by the level of average wage in the national economy.
  • to develop available services of pre-school education, including day nurseries.
  • the increase of the retirement age should be accompanied by the actions for increasing the employment possibilities for pre-pension age people.

Additional actions

  • improvement of gender statistics, allowing to follow the status of men and women in all life spheres, including in pension insurance, make international comparisons, ensure information control and evaluation of the efficiency of the execution of decisions.
  • to extend the scientific research on gender issues.
  • gender expertise of the current and drafted national legislation, as well as implementation of programs for socio-economic development of the Republic of Moldova.     

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