Radical
Statistics
Gender and wealth inequality
Tracey Warren, Karen Rowlingson and Claire Whyley
The paper which this report summarises aims to demonstrate the impact of gendered patterns of labour market participation on the accumulation of assets. (1) Despite well-recognised variation in wealth levels, there has been less attention paid to the gendering of assets than there has to gender differences in earnings and income. However, actual levels of wealth or assets are important measures of economic well-being, in addition to income, because 'analyses of income only capture the current state of inequality, while wealth embodies the potential for examining accumulated and historically structured inequality' (Oliver et al. 1993: 75).
The research was based on analysis of the Family Resources Survey (FRS), which collects extensive financial data on both income and different types of assets from a representative sample of 26,000 households in Britain. Wealth is quantified from three different sources: financial savings, housing assets and pension wealth (see Rowlingson et al. 1999). Taken together these three types of wealth can amount to a substantial assets portfolio which can be used to provide a safety net to fall back on and/or an income for the future. Yet measuring levels of assets is problematic. For example, although the FRS provides some of the most inclusive current data on wealth, it cannot provide information on the very small proportion of exceptionally wealthy groups who actually own the vast majority of assets. Tapping levels of wealth can also be problematic if respondents are not fully aware of the exact levels of any wealth they own, or the precise details of their housing savings or pension investments (Hedges, 1998; Mortimer et al. 1999). A further potential difficulty arises when researching the individual assets held by women and men in couples. Although we could assume that any assets are pooled equally between women and men, this approach neglects what may be marked gender divisions in access to economic resources within the home(2), and gives little indication as to who built up the majority of the financial investment and, importantly, who is entitled to keep what should the couple separate.
The paper, then, analyses financial and housing wealth at a family level but to also demonstrate gender disparity in assets, single households are examined. Next, those assets which are collected at an individual level are considered in the form of pensions that respondents have accumulated in their own right. The stress on individually accrued pension wealth is not to deny that many people will be in the position to access their partners' pension assets, but their own pension savings are the only ones to which individuals have a right, and not one which could potentially be removed or reduced substantially if the couple were to separate.
Gendered assets gaps: the findings
Lone mothers emerged as a distinctly wealth-poor group: their total median wealth stood at only £4,000 (Tables 1 and 2). Part of the reason for this was because they had very limited financial savings and very modest housing assets and, consequently, insignificant amounts of marketable assets and so no accessible financial safety net to speak of, on which to draw in times of extra need. Their very low incomes were really only allowing the women to survive on a day-to-day basis, and this was also impeding their accumulation of pension assets for the future.
Click HERE for Table 1: Total wealth (£s) by life cycle group
Click HERE for Table 2: Total wealth (£s) owned by single families by gender
We also examined data for single women over retirement age. It is interesting to study their overall assets because we can see, amongst other things, to what extent they are bearing the brunt of an income and wealth disadvantage which has accumulated over their working lives. Wide variation emerged with women who had never been married owning the most assets, no doubt as a result of being their own main breadwinners throughout their lives. Close behind them were widows. They would have had a male partner in the past, and when he died, many were left adequately provided for in terms of relative pension and housing wealth. In marked contrast, the small group of women who were divorced or separated had much less put by. If they had not made provision for themselves and had separated from a main breadwinner, older cohorts of women have risked severe economic deprivation in the short and longer term.
In the context of a weakening male-breadwinner model and growing separation/divorce rates for younger cohorts, the data on pension wealth were explored in more detail to examine whether the changing labour market behaviour of younger cohorts suggests a less pessimistic future for women. The emphasis in much of the research into gendered pensions has been either on relative access to/exclusion from good pension schemes and/or on comparative levels of pension income when women and men retire. In our research, we focus instead on the amount of pension savings that individuals are accumulating. Of working age women and men in 1995/96, the women had only saved an average of £2,000 compared with men's £13,000, and they held slightly more of their assets in state pensions and less in occupational pensions (Table 3). The male pension advantage was widest for older groups. This is both a cohort effect (due to the wider gender gap in patterns of labour market participation which had typified older persons' behaviour) and an age effect since women, across the cohorts, accumulate pension credits more slowly than men as they age. Women and men aged under twenty-five in the sample were the most equal in terms of their pension wealth. More (longitudinal) research would be required to see if the younger cohorts of women continue to fare as well as men as they reach the peak child-bearing ages. Unfortunately, the experiences of women who were only a little older (aged 25 to 35 in 1995/96) do not suggest such a positive picture because their pension assets had already begun to fall behind those of men.
Alongside these age dimensions, a distinct socio-economic status effect came into play, as we would expect. The highest socio-economic groups had the most pension wealth, with more of it in the form of an occupational pension. But even the women in high status jobs fared less well in pension savings than similar status men, and again their disadvantage increased as we move up the age categories.
Click HERE for Table 3: Levels (£s) and sources of pension wealth by gender, women and men of working age
Conclusion
Researching gender differences in wealth enabled us to move beyond the snap-shot pictures of economic inequality revealed in the analysis of income differences, and onto examining how gendered economic inequality accumulates over the life-course. We conclude that typical female carer-dominated employment profiles - combined with the financial dependence on another income source which this type of working pattern entails - are continuing to damage women's chances of a decent income in their own right in the short-term. In addition, in the medium term, they are depriving women of a savings safety net in their working lives. A longer term risk is that in a future Britain, where individuals will increasingly depend on private pensions rather than a state minimum, and one with a falling remuneration rate at that, the poverty which many women currently face in old age could very well persist.
ACKNOWLEDGEMENTS
We are grateful to the Joseph Rowntree Foundation for funding the original research on which this paper was based. The Family Resources Survey was made available by the Department of Social Security, but the DSS bears no responsibility for the analysis or interpretations presented here.
NOTES
- The following is a summary of: Warren, T. et al. (forthcoming) 'Female finances: gender wage gaps, gender asset gaps', Work, Employment and Society.
- A standard approach in research into wealth has been to assume, albeit with reservations, that access to income and assets is equal within the private sphere (see Hills 1998).
REFERENCES
Hedges, A. (1998), 'Pensions and retirement planning', D.S.S.
Hills, J. (1998), Income and Wealth. The Latest Evidence, York: Joseph Rowntree Foundation.
Mortimer, L., Farrant, G. and Turner, R. (1999) Asking About Pensions. A Review and Test of Survey Questions, DSS In-House Report No. 62, London: DSS.
Oliver, M., Shapiro, T. and Press, J. (1993) 'Them that's got shall get': inheritance and achievement in wealth accumulation', Research in Politics and Society, 5, 69-95.
Rowlingson, K., Whyley, C., and Warren, T. (1999) Wealth in Britain. A Life-cycle Perspective, London: PSI.
Karen Rowlingson,
Department of Social and Policy Studies,
University of Bath
Claire Whyley,
Personal Finance Research Centre,
School of Geographical
Sciences,
University of Bristol
Dr Tracey Warren
Department of Sociological Studies
University of Sheffield
Northumberland Road
Sheffield
S10 2TU
Telephone 0114 222 6460
Fax 0114 276 8125
E-mail: t.warren@sheffield.ac.uk
