Public Pensions for Nonworking Wives

Abstract

One of the most controversial issues which must be solved by any national pension program insuring against earnings loss on retirement is if and how nonworking persons should be covered. In deciding to provide old-age income to nonworking wives, the United States and Japan have adopted different program options. OASI in the United States covers nonworking wives as noncontributing dependents of covered workers. The receipt and size of benefits are dependent on the behavior of the worker. Kokumin Nenkin in Japan allows contributions by nonworking wives, who are thus able to build up credits toward retirement income independent of marriage duration or the husband's work behavior. Both these approaches will result in the inequitable treatment of some covered groups. How completely nonworking women are protected against income loss in old age by national pension programs in the United States (OASI) and in Japan (Kosei Nenkin and Kokumin Nenkin) is examined. Also discussed are the inequities in the treatment of covered groups and of the beneficiary population generated by the particular method of nonworker coverage adopted, and policy modifications are suggested.