Eastern Regions Offer Higher Female Pension Benefits by 357 Euros Compared to the West - East offers women significantly higher pension benefits compared to the West, with an average difference of € 357.
In a striking contrast to their western counterparts, women in eastern Germany are enjoying significantly higher average pensions. The Prognos Institute and the Gesamtverband der deutschen Versicherungswirtschaft (GDV) have calculated these averages, revealing a gap that can be attributed to various historical, socio-economic, and labor market factors unique to the regions.
One of the key contributing factors is the higher female labor force participation in East Germany during the communist era. Women in the former East Germany often participated more fully and continuously in the workforce, leading to more consistent pension contributions and less career interruption compared to women in West Germany, where traditional gender roles often led to part-time work or leaving employment for childcare.
Another factor is the more continuous and full-time work histories of women in eastern Germany. They typically had longer and more continuous employment histories, resulting in higher lifetime earnings and thus higher pension entitlements. In contrast, western German women have more fragmented employment records due to part-time work or career breaks for family reasons, reducing their pension claims.
The eastern German pensioners also benefit from fewer caregiving-related career disruptions. In the west, caregiving responsibilities often reduce women's opportunities for promotion and result in lower lifetime earnings, which translate into lower pensions.
Differences in unemployment and early retirement patterns also play a role. Although women in eastern Germany have faced higher unemployment at older ages, their pension system and employment history structures have compensated for this better than in the west, where more women retire earlier or outside the workforce, negatively impacting pensions.
Institutional pension framing and reforms have also played a part. The legacy of East Germany’s pension system, adjusted post-reunification, still reflects more favorable conditions for women’s retirement benefits given their historical labor participation and social policies.
In 2023, the average woman's monthly pension in eastern Germany stands at 1,218 euros. Women in Potsdam have the highest average monthly pension in Germany at 1,314 euros. In the east, including Berlin, there was no federal state where the average woman's pension was below 1,100 euros.
On the other hand, in the west German federal states, the average woman's monthly pension in 2023 is 861 euros. The large gap in pensions between men and women in the old federal states is due to many women having career breaks for family reasons. Women in the old federal states often worked part-time after their children grew up, contributing less to pension funds and pension schemes.
On average, a woman in the east receives 357 euros more than a woman in the west. However, the average monthly pension for men in Bavaria is 1,400 euros, while in Berlin, it is not specified. The Rhineland-Palatinate Eifel district of Bitburg-Prüm has the lowest average monthly pension for women in Germany at 668 euros, while the district of Bottrop in the Ruhr area has the highest average monthly pension for men at 1,686 euros.
These findings underscore the need for continued attention to gender inequality in pension systems and the importance of understanding the historical and socio-economic factors that contribute to these disparities.
Community policy, specifically in the context of eastern Germany's pension system, has historically been more favorable towards women due to their higher labor force participation during the communist era. This policy, coupled with more continuous and full-time work histories, has led to a significant advantage in pension entitlements for women in the east.
In contrast, the health-and-wellness aspect of women's lives in western Germany, particularly in relation to womens' health, often leads to part-time work or career breaks for family reasons, resulting in lower pension claims.
Furthermore, wealth-management and personal-finance implications of gender disparities in employment and pensions suggest that women in eastern Germany, on average, receive 357 euros more in monthly pensions than their counterparts in the west. These findings emphasize the importance of science in understanding the factors that contribute to gender inequality in pension systems and the need for ongoing policy considerations to address these disparities.
