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Gender gaps in pension outcomes reflect women’sand men’s different life courses and employmenthistories. In addition, key pension design featuressystematically penalize women, further reinforcingtheir socio-economic disadvantage in old age.These unequal outcomes are not inevitable,however, and can be remedied by action onseveral fronts. Chapter 2 has already outlinedactions to facilitate women’s access to decent workand to eliminate gender wage gaps. In addition,pension systems can be designed or reformed toredress women’s socio-economic disadvantagein old age. First, in contributory pension schemes,access has to be equalized and gender gaps inbenefit levels have to be reduced. Second, thecoverage and benefit levels of statutory noncontributorysocial pensions needs to be increased,particularly in countries where the majority of olderpeople currently lack any form of social protectionin old age. The following sections discuss these twostrategies in greater detail.Gender biases in contributory pensionsCurrently, women face important disadvantagesin earnings-related contributory pension schemes,which are the dominant form of coverage incountries with pension provision. 102 Womenparticipate less in the labour market and are morelikely to be unemployed or to work informally oron a part-time basis. They also tend to earn lowerwages and interrupt their market-based workmore often than men to take care of dependants.As Figure 3.5 shows, women are thereforeunder-represented among active contributors tocontributory schemes in most countries.Outside the developed world, contributory schemesexclude the majority of working-age women andmen. Gender gaps vary widely, but they also tendto be greater in Developing Regions. In somecountries in the Middle East and North Africa, menare 10 to 20 times more likely to contribute to apension scheme than women. While coveragerates are low for both sexes in South Asia andsub-Saharan Africa, women still face significantdisadvantages vis-à-vis men. Even in countrieswith relatively high coverage rates, such as Gabon,a much smaller share of women (24 per cent) thanmen (89 per cent) contributes to social security.In Latin America and the Caribbean as well as inEast Asia and the Pacific, gender gaps are smallerbut remain significant. In the Dominican Republic,for example, 23 per cent of men are activecontributors to pensions compared to 18 per cent ofwomen. 103Large gender gaps are also evident in pensionbenefits derived from earnings-related schemes,and they are wider for women with children. InFrance, for example, the gender gap in pensions(relative to average pensions for all men) is 19per cent for women who have no children, 31 percent for women who have one or two childrenand 50 per cent for women who have three ormore children. 104 These gaps not only underminegender equality in old age but also women’s rightto an adequate standard of living. In relativeterms, mean pension income for single women isjust above or equal to the poverty line in severalEuropean countries, including the Czech Republic,Estonia, Germany, Iceland, Latvia, Slovenia andthe United Kingdom. 105The shift to individual capital accountsIn at least 26 countries, mainly in Latin Americaand Central and Eastern Europe and CentralAsia, there has been an increase over the last twodecades in individual capital account schemes,many of them privately managed, following theearlier experience of Chile in 1981 and the adviceof international financial institutions such as theWorld Bank. 106 The shift from social insurance toindividual capital accounts has had detrimentaleffects, specifically on women’s income securityin old age. 107 This is both because benefit levelsare directly based on past contributions andbecause the benefit formula usually considersthe number of years during which the person isexpected to collect benefits, penalizing womenfor earlier retirement and, in some cases, theirgreater average longevity through the use ofgender-specific actuarial tables. In Chile, forexample, the combination of these factorscreates a gender gap of 66 per cent in pensionsderived from the individual capital account system(see Figure 3.6).