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GENDER EQUALITY

Stockholm’s women are more highly educated than men – but paid less: study

Women in Stockholm have on average a higher level of education than men in the capital, but typically receive lower salaries, according to a large-scale study carried out by the county administrative board.

Stockholm's women are more highly educated than men – but paid less: study
Women in Sweden's capital typically earn much less than men, even if they have a higher level of education. Photo: Christopher Hunt/imagebank.sweden.se

The median annual income for women included in the study, which looked at over 16,000 Stockholmers born in 1985, was 248,000 kronor ($26,600), compared to the figure of 341,000 for men. 

That was despite the fact that 41 percent of the women had undergone at least three years of tertiary education, while the figure for men was just 27 percent. 

“It's a problem in and of itself that men are lagging behind women in education. But regarding income, when women start to work, they don't receive any benefit from [having more education]. Women with upper secondary level education earn less than men without it, that's disheartening,” Per Bark, head of analysis at the county administrative board behind the study, told Dagens Nyheter, which was first to report on the results.

Bark said he was “quite surprised” at the size of the discrepancy.

The study was carried out between 2000 and 2016, and by the end of that period, 16,200 of the original 19,300 participants still lived in the Swedish capital.

Of those, women in the group earned an average of 90,000 kronor less each year than the men, even when other factors such as socio-economic background, sickness and other kinds of leave, and education were taken into account.

READ ALSO: Swedes hold strongest views on gender equality in EU: study

Women without upper secondary education typically earned the lowest salaries, with a median annual income of 109,000 kronor, while men without upper secondary education earned 271,000 kronor.

This was not only more than double the income of women with equivalent education, but also more than women with at least three years of tertiary education.

Gender wasn't the only factor that seemed linked to stark income differences. The study also looked at the difference between Stockholmers born in Sweden or abroad, which neighbourhood they lived in, whether they had disabilities, and education level. Stockholmers who were born overseas, had foreign-born parents, or came from a socio-economically disadvantaged background, were less likely to have upper secondary education, which was linked to earning a lower salary at the age of 31.

However, parental level of education seemed to be a more important factor than whether someone was born in Sweden or abroad, when it came to predicting whether they would complete upper secondary education.

Bark suggested that investments in education could be a way of evening out these inequalities. “If we can succeed with education and entry to the job market, that means big achievements over time,” the analyst said.

READ ALSO: Reader voices: What's it REALLY like working in Sweden?

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EUROPEAN UNION

Pensions in the EU: What you need to know if you’re moving country

Have you ever wondered what to do with your private pension plan when moving to another European country?

Pensions in the EU: What you need to know if you're moving country

This question will probably have caused some headaches. Fortunately a new private pension product meant to make things easier should soon become available under a new EU regulation that came into effect this week. 

The new pan-European personal pension product (PEPP) will allow savers to take their private pension with them if they move within the European Union.

EU rules so far allowed the aggregation of state pensions and the possibility to carry across borders occupational pensions, which are paid by employers. But the market of private pensions remained fragmented.

The new product is expected to benefit especially young people, who tend to move more frequently across borders, and the self-employed, who might not be covered by other pension schemes. 

According to a survey conducted in 16 countries by Insurance Europe, the organisation representing insurers in Brussels, 38 percent of Europeans do not save for retirement, with a proportion as high as 60 percent in Finland, 57 percent in Spain, 56 percent in France and 55 percent in Italy. 

The groups least likely to have a pension plan are women (42% versus 34% of men), unemployed people (67%), self-employed and part-time workers in the private sector (38%), divorced and singles (44% and 43% respectively), and 18-35 year olds (40%).

“As a complement to public pensions, PEPP caters for the needs of today’s younger generation and allows people to better plan and make provisions for the future,” EU Commissioner for Financial Services Mairead McGuinness said on March 22nd, when new EU rules came into effect. 

The scheme will also allow savers to sign up to a personal pension plan offered by a provider based in another EU country.

Who can sign up?

Under the EU regulation, anyone can sign up to a pan-European personal pension, regardless of their nationality or employment status. 

The scheme is open to people who are employed part-time or full-time, self-employed, in any form of “modern employment”, unemployed or in education. 

The condition is that they are resident in a country of the European Union, Norway, Iceland or Liechtenstein (the European Economic Area). The PEPP will not be available outside these countries, for instance in Switzerland. 

How does it work?

PEPP providers can offer a maximum of six investment options, including a basic one that is low-risk and safeguards the amount invested. The basic PEPP is the default option. Its fees are capped at 1 percent of the accumulated capital per year.

People who move to another EU country can continue to contribute to the same PEPP. Whenever a consumer changes the country of residence, the provider will open a new sub-account for that country. If the provider cannot offer such option, savers have the right to switch provider free of charge.  

As pension products are taxed differently in each state, the applicable taxation will be that of the country of residence and possible tax incentives will only apply to the relevant sub-account. 

Savers who move residence outside the EU cannot continue saving on their PEPP, but they can resume contributions if they return. They would also need to ask advice about the consequences of the move on the way their savings are taxed. 

Pensions can then be paid out in a different location from where the product was purchased. 

Where to start?

Pan-European personal pension products can be offered by authorised banks, insurance companies, pension funds and wealth management firms. 

They are regulated products that can be sold to consumers only after being approved by supervisory authorities. 

As the legislation came into effect this week, only now eligible providers can submit the application for the authorisation of their products. National authorities have then three months to make a decision. So it will still take some time before PEPPs become available on the market. 

When this will happen, the products and their features will be listed in the public register of the European Insurance and Occupational Pensions Authority (EIOPA). 

For more information:

https://www.eiopa.europa.eu/browse/regulation-and-policy/pan-european-personal-pension-product-pepp/consumer-oriented-faqs-pan_en 

https://www.eiopa.europa.eu/browse/regulation-and-policy/pan-european-personal-pension-product-pepp_en 

This article is published in cooperation with Europe Street News, a news outlet about citizens’ rights in the EU and the UK. 

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