Family ties: Women’s work and family histories and theirassociation with incomes in later life in the UK

This paper examines the relationship between the family and work histories of olderwomen in the UK and their individual incomes in later life, using retrospective datafrom the first fifteen waves of the British Household Panel Survey. The associationsbetween women’s family histories and their incomes later in life are relatively weak,and in many cases insignificant. Divorce, early widowhood and re-marriage are notassociated with significant differences in older women’s incomes, whilst motherhoodis only associated with a small reduction in incomes later in life – and not at all forcertain sub-groups of the population. Whilst there are significant differences in thework histories of older women with different family histories, this does not translateinto large differences in their personal incomes, because work history-related incomedifferentials are also relatively small. Even long periods in employment are notassociated with significantly higher incomes in later life if these periods were inpredominantly part-time or ‘mixed’ employment. Our analysis demonstrates howeffective public transfers have been in dampening work history-related differentials inolder women’s incomes, especially for widows and those towards the bottom of theincome distribution. On the one hand, this could be seen as a positive finding in thatthe ‘pension penalty’ associated with events such as motherhood and divorce are notas severe as is often anticipated. On the other hand, the main reason for this is that thepension returns to working longer are relatively low, especially for low-skilledwomen. Recent pensions reforms should eventually produce more equitable outcomesas between men and women, though possibly at the expense of greater inequalityamong women with different work and family histories.[...]