According to a study by the Organisation for Economic Co-operation and Development (OECD) "Pensions at a Glance 2025", Latvia has one of the most significant negative impacts in Europe on the pensions of women who have been on parental leave, writes Diena.
Overall, the public pension systems of OECD countries compensate for about half of the impact of a five-year work break that occurs for a mother with two children. On average across OECD countries, this five-year work break reduces the pensions of mothers with two children by 4% of the average salary. At the same time, this five-year break shortens the career duration by 11%.
In countries with absent or very weak compensation mechanisms, such as Israel and Turkey, a five-year work break due to childcare reduces pensions by a full 11%. In eight OECD countries, the impact of such a work break is less than 1% compared to women without children who have worked their entire career without breaks.
As noted by Dace Trušinska, a senior expert in the social insurance department of the Ministry of Welfare, the law on public pensions provides for the inclusion of periods when a person was not economically active, such as being on parental leave, in the insurance period. It should be noted that for a person on parental leave until the age of one and a half years, social insurance contributions are made from a special budget or the main state basic budget. Therefore, the time spent caring for a child also contributes to the insurance record, which is taken into account when assigning and calculating old-age pensions.
"It should be taken into account that the pension reflects the entire working life of a person. If a woman earned a lower salary than a man, or worked intermittently or part-time, this affects the size of her pension. These circumstances are not always related to raising a child, as fathers are increasingly taking on a larger role in family life and child-rearing," says Trušinska.
