Linked Lives, Lasting Effects: Financial Security after Widowhood in the Netherlands and Germany

Clara Overweg , Humboldt-Universität zu Berlin
William Fernandez, Hertie School

Widowhood is a key life course transition that disproportionately affects women, exposing them to heightened risks of income loss and economic insecurity in later life. As debates about the role and sustainability of survivor benefits intensify across Europe, understanding how policy contexts influence the economic consequences of widowhood becomes increasingly important. This study will compare the economic consequences of widowhood in two contrasting welfare regimes: the Netherlands and Germany. Drawing on administrative microdata from Statistics Netherlands (CBS) and longitudinal panel data from the German Socio-Economic Panel (SOEP), we will apply a staggered differences-in-differences approach (Callaway & Sant’Anna, 2021) to estimate the causal effect of widowhood on total and equivalized household income. We will further analyze heterogeneity across the pre-widowhood income distribution to assess distributional inequalities in the transition. In Germany, public pensions are strongly earnings-related and come with generous survivor benefits. In contrast, the Dutch public pension system provides a more redistributive, flat-rate basic pension, but survivor benefits are highly restricted. We expect widowhood to reduce total household income in both countries. However, income losses are likely to be larger in the Netherlands due to the limited public survivor benefit provision. At the same time, Germany’s earnings-related pension system may produce more unequal effects across the income distribution. This study contributes to research on financial security during widowhood by (1) providing insights into how pension policy contexts shape economic outcomes, (2) examining how income losses vary across the income distribution, and (3) applying a state-of-the-art causal identification strategy.

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 Presented in Session 97. Economic and Health Inequalities after Union Dissolution