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The gender superannuation (or ‘super’) gap is a persistent problem that often receives less attention than the gender wage gap. The scale of this issue is substantial, as females retire with super balances that are, on average, around a third lower than those received by males. In dollar terms, there is an average gender gap of around $50,000 across Australians with super balances.

Gender gap persistence in super is partly a result of the important causes of work patterns and wage gaps. But, that’s not the whole story.

Gender gap persistence also relates to the accumulating nature of modern super, where past imbalances can grow through investment earnings. Our research shows that risk aversion and financial literacy play a part in the gender super gap. However, general education differences affect the super gap in an opposite direction. The higher female proportion for university completions results in a lower gender super gap.

Household data and decomposition

Our analysis is based on individual-level survey data from the Household Income and Labour Dynamics in Australia (HILDA) survey. Wealth data are released every four years.

The HILDA data show that the gender super gap in dollar terms was higher in 2018 at around $60,000, compared to $50,000 in 2014. In contrast, the corresponding proportional gap was lower in 2018 at 33% compared to 40% in 2014. These numbers are based on individuals with super balances in both 2014 and 2018. The differences across gap measures can be explained by the growing averages across both genders. A given dollar gap is a lower proportion of a larger average balance.

Our research decomposes the dollar gap into a range of factors such as work patterns, wages, risk aversion, financial literacy, general education, and contributions. We also include a factor for the prior stock of super from four years earlier. This can summarise prior-period differences.

Quantifying the contributing factors

We find that work patterns and wage rates explain around 30% of the gender super gap over the four-year period to 2018.

The biggest factor for the gap (60%) was the prior balance of super from four years earlier, which summarizes all prior influences including work patterns and wage rates. Prior differences can then lead to investment-earning differences. The financial services industry has highlighted the large influence of investment returns for super balances.

Differences in risk aversion accounted for around 5% of the gender super gap. On average, males are less risk averse, consistent with taking higher investment risk. Higher risk investments tend to provide higher returns on average.

Financial literacy had a minor impact on the average gender super gap, with a 2% weighting in the gap. However, this was more than offset by a general education effect. The gap was 4% lower on account of a higher female proportion for university completions. It is possible that there are separate effects of general education and specific financial literacy on superannuation decisions.

Contribution-rate differences did not have a major impact on the super gap. Personal contributions from females tend to be slightly higher, but not enough to close the gap. Higher employer contribution rates for males slightly increased the gap. This may be due to work patterns, where casual employees receive lower super contribution rates on average. This relates to zero contribution rates when monthly wages were below $450. Females are more likely to be casual employees.

Addressing the super gap

The complex setting for the retirement incomes system makes it hard to address the gap. Links with the age pension complicate analysis. Frequent changes to the super system also have several impacts on gender equality. However, the complex issues involved provide opportunities for different approaches to help reduce the gap.

Continued work towards reducing the gender wage gap will also likely be crucial for reducing the gender super gap. The close link between wages and super is clear when considering that most super contributions are set as a percentage of wages.

One recent policy announcement is the removal of a contribution threshold. This means that more super contributions will be allocated for casual employees. As the casual workforce includes a higher proportion of females, this policy change could potentially help reduce the gender super gap.

Financial literacy improvements could benefit most Australians, and could potentially play a role in reducing the gender super gap. Key areas of financial literacy might be the multiple dimensions of risk, along with the relationship between risk and return.

Risk aversion could be influenced by financial literacy levels. Higher financial literacy may allow for more aggressive investment strategies, on average, for females. Modern and growing sectors, such as renewable energy, can potentially be investment targets within a balanced portfolio. Research shows females being more likely to be motivated by social and sustainable investments.

Many features of modern life in Australia reveal the importance of the gender super gap. Female life expectancy is longer and healthcare costs are on the rise. Equity across genders and individuals is of great importance, given the large amount of tax concessions that are directed to super. These aspects motivate attempts to eliminate the gender super gap.


Further reading

Best, R & Saba, N 2021, ‘Quantifying Australia’s gender superannuation gap’, Economic Record, Advanced online publication,

This article has 1 comment

  1. Yes, maybe if we were to make super voluntary or abolish it altogether, and instead provide a decent universal income, women would be much better off?

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