Purpose- This paper examines factors of the gender disparity among British people on their retirement decisions using nonlinear decomposition methods and which factors cause gender differentials in retirement decisions between 1991 and 2013. In this respect, both the British Household Panel Survey and Understanding Society are utilised.
Methodology- Both Fairlie (1999) and Yun (2004) methods are used to examine the impacts of observed demographic and income factors on gender differentials of retirement decisions. Findings- Age, hourly earnings, non-labour income and pension eligibility increase the gender gap, whereas education, good health conditions and being a homeowner act to reduce the gender gap.
Conclusion- Even though the labour force participation of older women has consistently been increasing over the past two decades, the gender disparity influenced by demographic and financial factors has not been significantly reduced over time. The demographic and financial factors mostly explained the gender gap; however, their effects significantly change due to the explained and unexplained parts during the 20-year period.