Gendered Trends of Retirement Propensities in East and West Germany : An Analysis of the Period 1975 to 2005

Abstract: Objective: This paper examines the propensity to retire in East and West Germany before and after the reunification from the year 1975 until 2005. The aim is to explain the period-trends in the retirement propensities in East and West Germany with special attention to gender. Conditions are discussed that may restrict an individual’s ability to retire. The ability to retire may for instance apply to the length of earnings-histories, which in turn may be affected by public child-care services, tax and retirement regulations. Method & Data: Event history analysis is applied using a multivariate piece-wise constant hazard model. The data comes from the first wave of the German Generations and Gender Survey (GGS) conducted in the year 2005. The sample size consists of 3698 individuals which produced 2070 events. Results: The results indicate that the propensity to retire was higher in East Germany than in West Germany. In West Germany, there was no significant difference in the propensity to retire for menand women. In East Germany, the propensity to retire was higher for women compared to men. In West Germany, no significant difference was found between married and single women. However, in East Germany, single women had a higher propensity to retire than married women. In West Germany, the propensity had increased after the reunification for men, but not significantly for women. In East Germany, the fall of the Berlin Wall in the year 1989 is clearly visible in the formof a highly elevated retirement propensity for especially women directly after the fall. However, the propensity quickly decreased and together with an increase of men’s propensity to retire since the reunification, the gender gap in the East eventually closed. Conclusion: For the period 1975 to 2005, it can be concluded that the propensity to retire was higher in East Germany than in West Germany. Environmental factors such as the breakdown of the East German economy, the division of paid and unpaid labour and the provision of child-care services probably have a significant effect on a person’s propensity to retire and lay the foundation for the different retirement patterns between the East and the West.