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Why Women’s Retirement Participation Rate Only Looks Lower Than Men’s

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While men have higher participation rates in retirement plans overall, when controlled for work status, women consistently have higher participation rates, the Employee Benefit Research Institute announced Tuesday.

Women who work full-time all year have a participation rate of 55.5% compared with 53.8% of men who work full-time all year, EBRI found in an Issue Brief originally released in October. The participation rate for male and female workers is 54.5%.

EBRI used data from the U.S. Census Bureau’s March 2011 Current Population Survey to find that “female workers’ lower probability of retirement plan participation in the aggregate is a result of their overall lower earnings and lower rates of participation in the full-time work force, in comparison with men.”

This is a trend that has continued since 2001, EBRI found, when women participated in retirement plans at the slightly higher rate of 58.5% compared with men’s 58.1%. The difference grew slightly in 2007 before dropping to its current rate.

“Furthermore, when examining participation by earnings level, the proportion of females participating in a plan was the same or higher than it was for males at each earnings level,” according to the report.

The difference is most dramatic for middle-income workers. Participation rates for workers who earned less than $10,000 differed by less than one percentage point (8.1% for men, compared with 8.6% for women). In the next tier, however, workers who earned between $10,000 and $19,999, the difference is 7.9 points. Participation rates for workers in the third tier differed by 13.5 points. At higher annual incomes, participation rates level off between male and female workers.

The report notes that participation rates are affected not only by individual factors, but by larger economic factors like stock market performance and the labor market. “The downturns in the economy and stock market in 2008 and into 2009 showed a two-year decline in both the number and percentage of workers participating in an employment-based retirement plan,” according to the report. “The 2010 levels stabilized as the economy was more stable but not experiencing strong growth, so these levels were just above the lowest levels set in 1997. The economy has improved but is still stagnant, which is likely to mean the 2011 numbers will see essentially no change or a decrease.”