Many individuals have interrupted careers because of having children and this indicator shows how this affects future pension entitlements. Average‑wage women with two children and taking five years out of the labour market to care for the children will have total pension payments 5% lower than those of a full-career female worker with two children but not taking a break on average across the 38 OECD countries. Colombia, Ireland, Mexico, New Zealand, Spain and the United States offer benefits at the same level as the interrupted career case. In Austria, Israel, Korea and Türkiye the impact is large as future benefits are more than 10% lower than those of full-career average‑wage mothers. For low earners, the negative impact of such breaks on future pensions is more limited in most countries.
Pensions at a Glance 2025
Nine countries give credits just for having had children, irrespective of whether a career break occurred to take care of children. Extra years of credit are given in Austria, Czechia, France, Germany, Korea and Slovenia, a more favourable conversion factor is applied in Italy, and a pension bonus is given in Hungary and Spain. In Germany having a child gives one parent a credit of one pension point annually for three years, thereby making it equivalent for pension purposes to earning the average wage throughout the credit period, resulting in a much higher benefit entitlement for low earners in relative terms. In addition, in both France and the Slovak Republic, it is possible to retire without penalty one year earlier for mothers in the no-break with children case in comparison to the full-career worker without children.
The results shown are a comparison between those women taking a career break having had two children compared to those who continued to work.
Most OECD countries aim to protect some periods of absence from the labour market to care for children. Credits for childcare typically cover career breaks until children reach a certain age. They are generally less generous for longer breaks and for older children. Many OECD countries credit time spent caring for very young children (usually up to three or four years-old) as insured periods and consider it as paid employment. However, once children are aged six years or older any credit given for this extended period is usually only to determine eligibility for early retirement and the minimum pension, and not to raise benefits. Some countries (Czechia, Greece, Hungary and Luxembourg) factor childcare into the assessment of eligibility but disregard them when computing the earnings base, thereby limiting the negative impact. In Greece and Slovenia for both 5‑ and 10‑year breaks and in Costa Rica, France, Hungary, Luxembourg and Portugal for the 10‑year break, workers retire later to be entitled to a pension without penalty due to the rules governing required contribution periods. In Slovenia, for example, a worker who enters paid employment at 22 but takes ten years out of work will have contributed fewer than the 40 years required to be able to retire from 62 without penalty. Rather she will have to continue in employment until the statutory retirement age of 67 as she is unable to reach 40 years of contribution to get a non-penalised pension.
On average, a 5‑year break lowers future benefit entitlements at the average wage by 4.6%, and by 3.5% for low earners (Figure 5.3). This is under half of the career length loss of 11½%for someone retiring at age 66, for example. In Austria, Israel, Korea and Türkiye, gross total pensions are over 10% lower than that of the full-career mother at the average earnings level as there is limited credit given for periods not working. Conversely, in Colombia, Ireland, Mexico, New Zealand, Spain and the United States, for women with two children the benefit is exactly the same as for the full-career case. In Japan, the credited earnings are flat‑rate past earnings, resulting in only a limited reduction in total pension payments. In Belgium, on top of the protection offered by credited earnings, the uprating of earnings with prices rather than wages limits further the impact of the income loss. Additionally low earners in Poland are also protected by the minimum pension, ensuring that the total pension is unchanged as a result of the break. In the Slovak Republic and Sweden, credits are given based on 60% and 75% of nationwide average income, respectively, resulting in higher benefits for low earners.
For the 10‑year break case, the average loss in total benefits increases to over 13% for average earners and 10% for low earners (Figure 5.4). Average earners in Austria, Greece, Hungary, Israel, Slovenia and Türkiye have future total pensions at least 20% lower than those of the full-career mothers, in particular as mothers have to work longer in Greece, Hungary and Slovenia. Korea also joins the list for low earners, but Slovenia is removed as low earners are better protected by the minimum pension.
Definition and measurement
The OECD baseline full-career simulation model assumes labour market entry at the age of 22. For the childcare career case, women are assumed to embark on their careers as full-time employees at 22, and to stop working during a break of up to ten years from age 30 to care for their two children born when the mother was aged 30 and 32; they are then assumed to resume full-time work until their normal retirement age. Any increase in retirement age is shown in brackets after the country name on the charts. The corresponding pension wealth is calculated for the career break case and this is compared to the pension wealth of the full career mother with no break. The simulations are based on parameters and rules set out in the online “Country Profiles” available at http://oe.cd/pag.
Note: Individuals enter the labour market at age 22 in 2024. The series shows the impact of the childcare break on total pension benefits. For Greece, Portugal and Slovenia, where taking a break implies that mothers have to retire later to avoid penalties, the figure is the change in pension wealth discounted back to the retirement age of the mother with two children without a career break. Numbers in brackets refer to the related increase in the retirement age. Two children are born in 2032 and 2034 with the career break starting in 2032. Low earners in Colombia, New Zealand and Slovenia are at 64%, 61% and 55% of average earnings, respectively, to account for the minimum wage level. * In France and the Slovak Republic, both mothers with two children with or without the break can retire one year prior to the normal retirement age, i.e. at 64 and 68, respectively.
Reading note: In Chile, an average‑wage mother with two children taking a five‑year break has future pension benefits that are 9.5% lower than those of the full-career mother.
Source: OECD pension models.
Note: Individuals enter the labour market at age 22 in 2024. The series shows the impact of the childcare break on pension benefits. For Costa Rica, France, Greece, Hungary, Luxembourg, Portugal, Slovenia and Spain, where taking a break implies that mothers retire later to avoid penalties, the figure is the change in pension wealth discounted back to the retirement age of the mother with two children without a career break. Numbers in brackets refer to the related increase in retirement age. Two children are born in 2032 and 2034 with the career break starting in 2032. Low earners in Colombia, New Zealand and Slovenia are at 64%, 61% and 55% of average earnings, respectively, to account for the minimum wage level. * In the Slovak Republic, both mothers with two children with or without the break can retire at age 68, one year prior to the normal retirement age.
Source: OECD pension models.