Why It Pays to Be a Mom in Spain - OZY | A Modern Media Company

Why It Pays to Be a Mom in Spain

Why It Pays to Be a Mom in Spain

By Robin Ngai


Because dotage scares the bejesus out of us.

By Robin Ngai

Please allow OZY to sum up a decade or so of retirement advice for you in two words: Good luck! More and more, it’s looking like we’re on our own in prepping for dotage — er, the silver years. Unless, that is, you live in Spain. And are a woman. And are into kids. For sure, this sounds like a lead-up to a science-fiction flick, but:

Spain is increasing pensions for working mothers by up to


And the more kids, the more money. Starting Jan. 1, 2016, working mothers with two children will see their pensions increase by 5 percent, those with three children will see a raise of 10 percent and those with four children will see an increase of 15 percent. Next up, free waterfront retirement villas for every Spanish mother? Well, not quite yet. In Spain, most pensions — part of its social security system — are based on a contributory system. Basically, the more you give, the more you get (there’s also a “noncontributory” kind of pension for low-income citizens). To get full benefits, a person must work for 37 years, at which point they receive the average amount they’ve made in the past 25 years of their career. But working fathers currently receive 30 percent more in pension payments. Alfonso Alonso, the minister of Health, Social Services and Equality, announced in a public statement that this new law would not only help women, but also bring them a step closer in bridging the pay gap between working mothers and fathers. (Alonso did not reply to OZY’s request for comment.) Right now, if a woman has worked only 33 years, she doesn’t receive a full pension. But with this measure, says José Ignacio Conde-Ruiz, a professor of economic analysis at the Complutense University of Madrid, if you have more than two kids, “they will increase pensions and you may even get full pensions in the end.”

Spain may have a more practical, less feminist motive too — basic survival. Research by the World Bank states that Spain’s fertility rate is at 1.32 births per woman, well below the widely accepted “replacement rate” of two children per woman for keeping a country’s population stable. In addition, the government is coming up on election season. “I think that they introduced this measure because we are in electoral season, and [the new pension law] doesn’t cost very much,” says Conde-Ruiz. He says that few women are retiring now, and “a big chunk” of women are still working. “Maybe in the future, we’ll see more of its impact.”

Other experts see less potential. Richard Marin, clinical professor of finance at Cornell, predicts the new law won’t fix anything in the long term for Spain’s problems. He calls it “very progressive” and says it “will clearly benefit working mothers,” but says he is unsure if pensions are the right vehicle for the goals. Older women eligible for pensions probably don’t have dependent children, he says, “so I’m not sure what problem this solves.” Indeed, we’re hazarding a random guess here that a 55-year-old woman may not have the option to boost her pension via newborns. Marin adds: “Clearly, anything that increases entitlements without increasing pension assets will be long-term harmful to Spain overall.”

In the context of Europe, this law may be a little less surprising. In France, after all, the government pays a variety of family benefits to citizens with children, whether or not they work. Caveats aside, anything that makes anyone’s dotage less terrifying sounds OK. Pardon us while we surf Kayak for the going rate on one-way tickets …


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