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By Jenny David
April 30—The gender gap in Israeli wages has created an even larger gender gap in pension savings, according to a recent study by the Economy Ministry's Equal Employment Opportunities Commission.
The likelihood of saving for retirement varies widely between population groups, but within any particular group men and women are almost equally likely to save for retirement. Because men on average earn more than women, however, they also save more, according to the report obtained by Bloomberg BNA April 27.
Israeli men took home an average 34 percent more pay than women in 2012. The income gap was largest among ultra-Orthodox Jews at 43 percent, smallest among Israeli Arabs at 22 percent. Men in the other three groups examined—immigrants from the former Soviet Union and from Ethiopia and “all other” Jews—took home between 33 percent and 37 percent more than their female counterparts.
Because men tend to work longer hours than women, the disparity shrank when calculated on an hourly basis. The hourly wage gap economywide was 15.5 percent in 2012, the commission said, reflecting a 24 percent gap among the ultra-Orthodox, 15 percent among Soviet immigrants, 12 percent among Ethiopians and 21 percent among all other Jews.
On an hourly basis, Israeli Arab women actually earned 9 percent more than Israeli Arab men, and the small wage gap among Ethiopians can be attributed to their low wages in general, according to the report.
By all measures, the gender gap in pension savings is wider than that in wages. The ultra-Orthodox, whose aggregate income is the lowest among the groups surveyed, showed the largest gap in pension savings, men contributing 48 percent more than women. The gender-gap in pension savings among all other Jews was 39 percent, followed by Soviet immigrants at 33 percent, Arabs at 24 percent and Ethiopian immigrants at 17 percent.
Men and women within each population group were about equally likely to make pension contributions, but the commission found large differences between groups. Male immigrants from the former Soviet Union topped the list of savers with a 74 percent likelihood of making pension contributions. Other male Jews were only slightly behind at 73 percent, and women in both groups saved at a similar 71 percent rate.
The gap again grew among ultra-Orthodox Jews, 64.5 percent of men and 58 percent of women contributing to pension funds; among Ethiopian immigrants, 55 percent of men and 52 percent of women making pension payments; and Israeli Arabs, 39 percent of women making contributions and 35 percent of men.
“It is surprising to discover that, despite gender gaps in pay, there are not significant gender disparities in the rate of pension contributions within each population group,” said Tziona Koenig-Yair, the equal opportunity commissioner. The gender gap in the amount they contribute, however, “creates an additional gap in the economic strength of men compared to women.”
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The full report on “Leaders in Pension Savings” is available in Hebrew at http://op.bna.com/hrlw.nsf/r?Open=tbue-9vzpld. The study was based on Central Bureau of Statistics data from 2012.
For more information on Israeli HR law and regulation, see the Israel primer.
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