Response to interpellation 2023/24:19 on the consequences of the unequal uptake of parental leave for women's pensions
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
M believes that the work line is the basis for the pension system and that women's increased labor force participation and more hours worked are crucial for better pensions 1. M proposes an enhanced job tax credit to make it more profitable to work 1. M argues that double days can contribute to a more equal distribution of parental leave 1 and emphasizes the labor force participation of foreign-born women 2. M believes that tax cuts are a means to make it more profitable to work 3 4. S argues that the gradual reservation of months has had an effect on equality 5. S wants to increase the individualization of the parental insurance 5. S believes that tax cuts do not solve structural imbalances 5. S emphasizes that the take-up of parental leave is unequal and that there are tools beyond tax cuts 6. S believes that the Minister's response lacks ambition 7.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Statsrådet Anna Tenje (M)
Mr. Speaker! Kalle Olsson has asked me if I consider that there is a connection between the difference in men's and women's use of parental leave and the pension gap. Kalle Olsson has also asked me if I am prepared to take measures to achieve a more equal use of the parental insurance.
More people in work builds a stronger society. It also strengthens the pension system and the individual's own economy. The work line constitutes the foundation for the entire pension system. The underlying principle is that the pension shall be based on work and that there shall be a clear connection between earned income during life and the paid-out general income-based pension.
Part of the so-called pension gap is explained by the fact that women's labor force participation has historically been lower than for men. Regarding earned pension rights, the gap has decreased significantly over time, but it still remains at approximately 10 percent, even among the younger cohorts. In order for the general income-based pensions to become more equal, it is therefore important that women increase both their labor force participation and the number of hours worked.
Since the pension is a reflection of the years of employment, different life incomes, part-time work, and an unequal distribution of parental leave result in income-based pensions that are not equal. The compensatory elements of the pension system do, however, contribute to reducing the difference in earned pension rights between women and men. This occurs primarily by awarding pension rights for child years to the parent with the lowest income, which generally is women. Without pension-qualifying amounts for child years, the gap in terms of pension rights would have been even larger.
Increased labor force participation and more hours worked are prerequisites for higher and good future pensions for women. To reach that, it is important, among other things, to work on making it more profitable to work than not to work and more profitable to work more. The Government has therefore proposed an enhanced job tax credit primarily for low- and middle-income earners. It makes it more profitable to work more hours but also to move from benefits to work. Next year, a person who works as a teacher, to mention just one example, will earn 7,000 kronor more after tax than before.
The Government also considers that the parental leave should offer freedom of choice and flexibility - two important basic principles. The so-called double days, which we are now introducing, can contribute to increased presence of both parents in the home and a more equal uptake of the parental leave benefit. It makes it possible for parents to be off together when the child is small, which strengthens the joint parenting itself. It can also increase the conditions for combining family life with a high labor force participation. The Government has therefore, in the budget bill for 2024, submitted proposals for a doubling of the number of double days and an extension of the period during which these can be used.
Kalle Olsson (S)
Mr. Speaker! Minister! There are many reports, debate articles, investigations, and budget bills - most recently the government's own - that describe the pension gap between men and women and the fact that women have, on average, 20 percent lower general pension than men. That problem and those differences are not something that arose yesterday. They have accompanied us for a long time. Despite that, we have therefore not succeeded in bridging the differences. It can only be described as a failure.
A typical woman with a low pension can be a person who has worked part-time for large parts of her working life, not infrequently within the public sector, and who in addition has taken the greatest responsibility for children and family. One might think it is about another time, when the mother stood at the stove and received the children when they came home from school.
It is clear that equality in our country has taken large steps over the last three or four decades. But at the same time, we also see today that something very tangible happens when the first child is born. Suddenly, we see that equality rolls back, that traditional gender norms come out of the closet, and that women step back from working life and become the primary caregiver for the children.
Mr. Speaker! The statistics are as crystal clear as they are depressing. Seven out of ten parental leave days are taken by women. Six out of ten temporary parental leave days - that is, paternity/maternity days - are taken by women. When the trade union TCO dug deeper into the statistics earlier this year, they found that women take longer unpaid parental leave during the children's first two years than men take in total during the same period. Parental leave is, in other words, even more unequal than what is visible if one only looks at the withdrawal of parental leave benefits.
We can see that 15 years after the first child's birth, the gap in income has increased by an average of 35 percentage points between man and woman. This inevitably has consequences for women's careers, wage development, and ultimately pensions. It is not really surprising, just as the Minister states in his response here, because the pension system is and shall be a reflection of what one has achieved during working life - that which is sometimes called the life income principle. What you have earned shall form the basis for what you receive in pension, and in addition to that, there are certain compensatory elements.
The question is what should be done about this. The Minister mentions two measures - partly reduced tax, partly an expanded right to use double days. When it comes to double days, it can be noted that of the parents who have chosen to use that possibility today, 3 percent have used all 30 double days that are possible to take out. The expansion that the government has now signaled may possibly, perhaps, have some form of positive effect, but there does not seem to be any rush for the double days.
A concrete question to the Minister is what effect the measures that the Minister reports will have to address the uneven distribution of the parental leave, given that it is precisely these two reforms that the Minister highlights. Please describe how they will lead to a more equal uptake of the parental leave in, say, five or ten years' time! What is the government's forecast?
Sanne Lennström (S)
Mr. Speaker! In this year's budget bill, we can read that the uneven distribution of the parental leave "has negative effects on women's wage development and also on long-term earning capacity."
I genuinely believe that Minister Tenje, just as I do, finds it worrying that the wage gap, for the first time in 15 years, has not only stagnated but is actually increasing. It is worrying because it affects women's incomes but also their pensions. A majority of the poor pensioners today are women, and that is why Kalle Olsson has called for this debate.
What is the cause of this then? I have heard a unanimous answer here in the Riksdag when we asked the parties in the labor market. They said that it is due to an unequal withdrawal from the parental insurance. There is also research from, for example, IFAU that gives the same answer: It begins with the first child. Before that, men and women earn almost exactly the same. 15 years after a child has been born, the wage difference, as Kalle Olsson mentioned, is 32 percent larger between mother and father.
Women who have more than two children lose even more than this statistics show. Among couples who are 40-plus, we know that up to 75 percent of the wage gap can be explained by parental leave and vab. Everything falls into Försäkringskassan's slogan: "That which is good is shared equally" – that is to say, time with the child. But I would like to add that one also shares equally on what is negative. Then I am not just talking about sleepless nights but about economic consequences.
Parents take out less than 30 percent of the parental days. Therefore, women's wages lag behind, and therefore there are more female poor pensioners than male.
The government has mentioned several different proposals regarding the parental leave. One proposal concerns increasing the number of double days. That could be positive in this context, but it does not go all the way.
It is not enough for the government to increase the number of double days and hope that the mothers stay home more. More must be done if one does not want to create more female pensioners in poverty, but in the government base there are two parties that want to set the equality policy regarding the parental leave at such a low level that Sweden would go against EU directives.
The government also has a proposal that one should be able to transfer days within the parental leave - 90 days - to whoever one wants. Here, there is a potentially large risk that in workplaces where mostly men work, a kind of culture could be established where one says: "Grandmother or grandmother can take the days, right? You don't need to be on parental leave with your child." The reason that risk exists is that legislation is normative.
Right now, female poor pensioners are being produced via the Swedish parental insurance. Research, statistics and experts say the same thing as we do here: It is due to the parental insurance, to a very large extent.
In view of this, I would like to ask Minister Anna Tenje what can be done about this. Does the Minister acknowledge that the problem exists? If tax cuts are the answer – how many tax cuts are needed before we have an equal parental leave?
Statsrådet Anna Tenje (M)
Mr. Speaker! Member Kalle Olsson raises a very pressing question. I am happy to discuss it in this chamber. At the same time, just as both members have pointed out in their remarks, it is no simple question. Regardless of which party the government has had in recent years, this has been a question that has been debated and discussed. The consequences in the form of unequal pensions have, therefore, not arisen now.
I am willing to agree with Member Kalle Olsson regarding the concern over the development within the area of equality. We have taken large steps forward and bridged many differences, or at least reduced the gap on many levels, when it comes to equality. But when we look at, for example, foreign-born women, the labor force participation here is significantly lower than among women who are born in Sweden. It is clear that it makes one a little worried.
Measures are needed, and therefore the government's proposal now, regarding the activity requirement for the social assistance, a benefit ceiling and eventually a qualification for welfare, is an important component together with a reduced tax on work. It shall become more profitable to move from benefits to work and there shall be incentives to de facto seek out the labor market to a greater extent.
I am fully aware that more components are required to ensure that more foreign-born women seek out the labor market, but it is clear that if we are now to beat our chests because we are a country that truly has the flag at the top when it comes to equality, it is a matter of working on many different fronts.
The government and I myself spend a great deal of time on this issue. The withdrawal from parental leave should become more equal. It is good for both mothers and fathers as well as children, and therefore we put forward, among other things, the proposal to double the number of double days. We hope that this will have a positive outcome in these parts.
An equal distribution of parental leave is important, but the problem is more multifaceted than that and also begins significantly earlier than at the birth of the first child, as Member of Parliament Lennström pointed out. It starts earlier. It is seen that expectant fathers have a higher average annual income than expectant mothers, and this naturally has consequences for both the distribution of the parental leave and what one de facto receives.
After the child is born, income inequalities also increase, and here unpaid leave and part-time work play a major role. For that very reason, it is important to work on more women moving from part-time to higher part-time or, for that matter, from part-time to full-time. It is about encouraging work, among other things through the job tax credit, which this government does and has done in several different parts even previously. Measures aimed at low- and middle-income earners are important from an equality policy perspective.
In addition to these positive effects for women on the total labor supply, the work principle, their own finances and future pension, I believe it will be extremely important to work with foreign-born women so that they enter the labor market.
Kalle Olsson (S)
Mr. Speaker! I heard the Minister say that the government hopes that the double days will have an effect. But one seems to place even greater confidence in tax cuts being a more effective measure to address the inequality in the parental insurance.
Mr. Speaker! It may not come as a shock that the Moderates and the Moderate government minister highlight lowered taxes as the solution to the differences we are talking about here. Lowered taxes are somewhat of a Moderate universal solution. Right now, one could indeed say that lowered taxes are justified, not least on low and normal incomes, given that we have a cost situation that involves very high prices and high interest rates. On the other hand, it is highly questionable what it does for equality between women and men in the long run and for the pension gap that we are talking about here.
According to the Gender Equality Authority's report from earlier this year, it is rather the case that the tax system as it is designed in our country counteracts equality. The truth is that completely different types of political reforms are required if one seriously wants to address the inequality in working life and subsequently the pension gap. To promote particularly women's labor force participation, it is extra important to have a strong and well-developed welfare state throughout the country. There we see that the government's initiatives are not sufficient and do not meet the needs.
If we are to zoom in on the parental leave, we know that what has influenced equality in the parental leave the most is what is sometimes referred to as the reserved months for fathers, but which more correctly concerns the fact that we have gradually reserved more months for each parent, currently 90 days. It is therefore not the reduced tax that the experts in the field usually refer to, but the fact that we have gradually reserved more months for each parent. That is what has had the effect.
We Social Democrats believe that there are reasons to further increase the individualization of the parental leave. It is about children having the right to have a close relationship with both of their parents. But it is also about what we are talking about here today. I believe that many, possibly with the exception of some Moderates, understand that lower taxes and a few more double days are not what will solve the structural imbalances we see in the parental leave, which so significantly affect women's position in the labor market and also their pension outcomes.
The Minister may well elaborate further on precisely this matter regarding tax cuts and inform us others. If now reduced tax is the key to a more equal family life and a more equal responsibility for the children, why then have we not come further today? This applies not least considering all the large and many tax cuts that we have seen throughout the entire 2000s which have been made not least by conservative governments.
The forecast today is that if we were to continue the development as it has looked over the last few years, it would take 70 years before we have an equal distribution of the parental leave. If the many and large tax cuts of the last 20 years have not led to a desired result, a desired outcome, how many more tax cuts does the Minister assess that we would need to approach the goal?
Sanne Lennström (S)
Mr. Speaker! Thank you very much for the answer, Minister!
The parental insurance is a crown jewel in our Swedish social insurance system. But we should at the same time consider what the unequal distribution of parental leave between men and women means for women's incomes, career opportunities, and not least pension, which we are talking about here today.
I have debated with Minister Tenje about the parental leave before in the chamber. On one occasion, she corrected me and said: It is not the parental leave that is unequal, but it is the take-up. This is where the policy is responsible.
If the outcome is unequal, the parental insurance is also unequal. If the government does not see that, we will have very difficulty getting anywhere in the discussion. Then we cannot together stop the number of poor pensioners that may come to be produced in the future by our social insurance system.
Therefore, I hope that today we can leave the chamber and at least agree that there is a real problem here so that we can carve out the solutions together. One thing the Minister and I agree on in any case: This is an issue that concerns women's own empowerment.
There are several different tools to review here that are not about tax cuts, as the government and the Council of State mention. This concerns everything from speed premiums to "pappadagar" (daddy days), information initiatives, but also legislation.
The government has chosen in its budget to retain the wording about creating equal parenthood. Retaining that goal is also something that obligates.
I return to the question: Does the Minister believe that there is a connection between men's and women's use of parental leave that creates the pension gap, yes or no? What does the Minister and the Government intend to do about this?
Statsrådet Anna Tenje (M)
Mr. Speaker! I am very pleased with Member Kalle Olsson's question as to whether I can elaborate a bit more on what lowered taxes contribute in terms of positive consequences for our society. I could speak for a long time on this.
I will nevertheless limit myself to the question we are discussing today. I can only state that we have somewhat different views on reduced tax from the Social Democrats' and the Moderates' sides. Pleasantly enough, it does seem that the Social Democrats have understood, in any case so far, that the job tax credit is of very great importance for our low- and middle-income earners and also affects labor force participation.
Mr. Speaker! Lower taxes are a means. The goal is freedom, self-determination and, above all when it concerns the issue we are talking about here, that it should be more profitable to work more hours. We have just agreed that the basic pension system we have today rests on how much we have worked.
The pension system is strongly linked to exactly how much we have worked. It is a reflection. If we are to get more equal pensions, it is required that women work more. It is about them moving from part-time to full-time and simply having more hours worked.
If we have lowered taxes as a means to make it more profitable to work and take the step of perhaps moving from part-time to full-time, we also have better conditions to achieve more equal pensions and create greater labor force participation from women.
Lower taxes are an important means to create incentives and a will to work more and to get more women to move from part-time to full-time. It is actually the biggest and decisive difference when it comes to the pensions.
The parental allowance and its withdrawal, and also the maternity leave and so on as we have touched upon, have very large consequences for how the pensions are subsequently reflected. Here it is extremely important to point out two important assignments that both Försäkringskassan and Pensionsmyndigheten have. This concerns when it comes to information and knowledge dissemination of how our systems are structured.
One of the important assignments for Försäkringskassan is to do exactly this, and subsequently also for Pensionsmyndigheten. It concerns informing and spreading knowledge that what you do during your time when you work has consequences for how much lands in the orange envelope. On Minpension.se on the web, one can now quite easily see what the consequences in the orange envelope will be of how one distributes the parental leave between the parents.
There are many different parts to this. These things must work individually and, above all, together. Then it can have very large effects. When it comes to the double days and the extension of the usage, we have seen that families who use the double days have a more equal distribution of the parental leave further ahead. If we can get more families to utilize the double days, we can also get more to share the parental leave more equally between them.
Overall, several different measures are needed. But I would still like to assert that getting more women to work more, to move from part-time to full-time, is perhaps the most important part of it all. It is also a matter of getting more foreign-born women to enter the labor market at all. This will also be decisive for equality and development moving forward.
Kalle Olsson (S)
Mr. Speaker! I note that the Minister does not address the issue of individualizing the parental leave. The single measure that experts say has done the most good and had the greatest effect in reducing the differences in the take-up of parental leave is left unremarked by the Minister. Instead, it is tax cuts that are the answer.
The original question in the interpellation was whether the Minister intended to take measures to promote a more equal uptake of the parental leave to eventually reduce the pension gap. When I hear the Minister speak, it unfortunately does not feel like there are any ambitions. The answer to the question is no.
Despite the fact that the government, just as Sanne Lennström pointed out in her post, notes in its own budget bill that the distribution of the parental leave has clear negative effects on women's wage development and thus on the size of pensions, it is largely blank - double days and reduced tax. One can almost imagine how the discussion went before the response to the interpellation. In practice, it echoes empty on measures. Something must be put forward, however, so it becomes double days and reduced tax.
Perhaps it is naive, Mr. Speaker, to expect anything else given which parties are included in the government base - it must still be said. The largest party in the government base, Sverigedemokraterna, does not want any reserved months in the parental leave at all. The same applies to Kristdemokraterna. Should these two parties be allowed to decide alone, we would wipe away decades of gender equality gains in our country.
Actually, it might have been more adequate to ask the Minister if she can guarantee that during the mandate period there will not be changes that worsen equality in the parental insurance and lead to an even larger pension gap. That might have been a reasonable level of ambition.
Statsrådet Anna Tenje (M)
Mr. Speaker! Once again, Member Kalle Olsson: Lower taxes are the means. More hours worked, increased labor force participation for women, and a transition from benefits to work is the goal, for it is this that matters for how much one has in the pension envelope.
No, lower taxes are not the overriding answer. It is what lower taxes lead to that is the answer to how we increase equality, how we bridge the pension gap, and how we get more equal pensions. That is the point.
I understand that the Social Democrats have not yet come that far regarding the tax issue and the view on tax cuts. It is only recently that one has started to propose this. I am, however, pleased about it. It is bourgeois governments that year after year have lowered taxes for low- and middle-income earners, and we are doing that in this budget as well – precisely so that it will become more profitable, precisely so that one shall de facto move from benefits to work so that we get a higher labor force participation.
I can state that we have somewhat different views on this. I believe that flexibility, an increased freedom for parents to be able to choose for themselves how they want to distribute the parental leave, is important. I believe that wise and good decisions are made in the families. But then it is also important that one has all the information and knowledge that one needs to be able to make those wise decisions. That mission belongs to our two agencies.
Overall, with other measures that we are now taking in the budget, I believe that this will mean that we will now see a positive development, not least when it comes to foreign women's participation in the labor market.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.