On average women can expect to spend almost 4.5 years longer in retirement than men (Figure 4.10). In most Eastern European countries this gap was at least six years, and also in Japan the gender gap is more than six years. Longer periods in retirement exposes women to old age poverty, resulting from the link of many pension schemes to earnings and the gender pay gap observed in all OECD countries. In addition, price indexation of pension payment in many countries means that the oldest old, predominantly women, become relatively poorer during retirement.
The duration of expected years in retirement for women in emerging countries varies from 20 years in Brazil and the Russian Federation to 15 years in South Africa (Figure 4.10, Panel A). The variation is less for men, who can expect 12 to13 years in retirement (Figure 4.10, Panel B). While the effective exit age in Brazil was more than six years lower for women than for men, the dif-ference in the Russian Federation was close to three years.
The average duration of expected years in retirement across OECD countries has increased over time. In 1970 men in the OECD countries spent on average 11 years in retirement and by 2012 this average increased to 18 years (Figure 4.11, Panel B). The duration of the expected period in retirement was longer for women; increasing from 15 years on average in 1970 to 22.5 years in 2012 (Figure 4.11, Panel A).
The increase in average duration of years in retirement from 1970 to 2012 is due both to a drop in the effective exit age from the labour force and to increased longevity. Effective age of labour force exit decreased gradually from 1970 to the late 1990s for both men and women. After some relatively stable years, the average effective exit age started to increase slowly from 2004. Life expectancy at the effective exit age from the labour force increased substantially during this period, particularly for women, and over the last two decades for men as well. Over the past few years, this increase has been fairly equal to that of the effective exit age from the labour market, and potential years in retirement have stabilized.