Understanding the gender pay gap: definition, facts and causes
Working women in the EU earn on average 12% less per hour than men. Discover statistics by country and read about the reasons behind the gender pay gap.
Although the equal pay for equal work principle was introduced in the Treaty of Rome in 1957, the so-called gender pay gap stubbornly persists, with only marginal improvements being achieved in recent years.
What is the gender pay gap and how is it calculated?
The gender pay gap is the difference in average gross hourly earnings between women and men. It is based on salaries paid directly to employees before income tax and social security contributions are deducted. Only companies of 10 employees or more are taken into account in these calculations. The EU average gender pay gap was 12% in 2023.
There could be many reasons for the existence of the gender pay gap. Some could be related to the level of education, work experience, or working part-time. There are more women than men in some economic sectors where average wages are lower. Another reason could be that men often hold better-paid positions than women in a given sector.
Gender pay gap data by country and in the EU as a whole
The EU average gender pay gap was 12% in 2023. It was calculated for enterprises with 10 or more employees.
Across the EU, the pay gap differs widely. It was the highest in the following countries in 2023: Latvia (19.0%), Austria (18.3%), Czechia (18.0%), Hungary (17.8%) and Germany (17.6%). Luxembourg has closed the gender pay gap. Other countries with small gender pay gaps in 2023 were: Belgium (0.7%), Italy (2.2%), Romania (3.8%), Malta (5.1%) and Slovenia (5.4%).
The gender pay gap increases with age: it might increase as a result of career breaks by women, although these patterns vary between countries. The gap also differs by industry and, in 2023, it was higher in the private sector than in the public sector in the majority of EU countries.
The gender pay gap means women are at higher risk of poverty in old age. In 2020, women in the EU aged over 65 received pensions that were on average 28.3% lower than pensions received by men.
Causes of the gender pay gap
Part-time work
On average, women do more hours of unpaid work, such as childcare or housework.
This leaves less time for paid work. According to figures from 2022, almost one-third of women (28%) work part-time, while only 8% of men work part-time. When both unpaid and paid work are considered, women work more hours per week than men.
Career choices influenced by family responsibilities
Although more women than men finish higher education in the EU, they are represented less on the labour market. Women are much more likely to be the ones who have career breaks: in 2018, a third of employed women in the EU had a work interruption for childcare reasons, compared to 1.3% of men. Some career choices made by female workers are influenced by care and family responsibilities.
More women in low-paying sectors
About a quarter of the total gender pay gap can be explained by an over-representation of women in relatively low-paying sectors, such as care, health or education.
About 3 in 10 women in the EU work in education, health and social work, which are traditionally low-paid sectors, while only 8% of men are employed in these sectors. On the other hand, almost a third of men are employed in science, technology, engineering and mathematics, which are higher-paid sectors.
The number of women in science, technology and engineering has increased. Women accounted for 41% of the workforce in 2021.
Fewer and lower-paid female managers
An important reason for the gender pay gap is that women are often under-represented in higher-earning positions in companies. For example, in 2021, women held on average 34.7% of managerial positions in the EU.
If we look at the gap in different occupations, female managers are at the greatest disadvantage: they earn 23% less per hour than male managers.
The benefits of closing the gap
Reducing the gender pay gap creates greater gender equality while reducing poverty and stimulating the economy, as women would get more to spend more. This would increase the tax base and would relieve some of the burden on welfare systems. Assessments show that reducing the gender pay gap by one percentage point would increase the gross domestic product by 0.1%.
Parliament's actions against the gender pay gap
Negotiators from the Parliament and EU countries agreed in December 2022 that EU companies should be required to disclose information that makes it easier to compare salaries for those working for the same employer, helping to expose gender pay gaps.
In March 2023, Parliament adopted those new rules on binding pay-transparency measures. If pay reporting shows a gender pay gap of at least 5%, employers will have to conduct a joint pay assessment in cooperation with workers’ representatives. EU countries will have to impose penalties, such as fines, for employers that infringe the rules. Vacancy notices and job titles will have to be gender neutral.
The proposal for the new rules followed the Parliament’s resolution on the EU Strategy for Gender Equality from January 2021, in which MEPs called on the Commission to draw up an ambitious new gender pay gap action plan with clear targets for EU countries to reduce the gender pay gap over the next five years.
In addition, Parliament wants to make it easier for women and girls to reach top positions and boost gender equality on corporate boards. In November 2022, MEPs approved rules, which aim to introduce transparent recruitment procedures, so that at least 40% of non-executive director posts or 33% of all director posts are occupied by the women by the end of June 2026.
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