Gender pay gap

The gender pay gap or gender wage gap is the average difference between the remuneration for men and women who are employed. In most countries, women are paid less than men for the same work. There are two distinct measurements of the pay gap:

• non-adjusted pay gap is the average difference in yearly earnings between male and female workers
• adjusted pay gap is the difference between how much men and women make for the same work, and it takes into account differences in hours worked, occupations chosen, education attained, and job experience.

In the United States, for example, the non-adjusted gender pay gap is 21–17%, while the adjusted gender pay gap is 5–1%. Causes for gender pay gaps include having children and parental leave, gender discrimination and gender norms. In the EU around two-thirds of the gender overall earnings gap is associated with lower women's working hours (gender hours gap) and lower women's employment rate (gender employment gap). The gender pay gap can be a problem from a public policy perspective in developing countries because it reduces economic output and means that women are more likely to be dependent upon welfare payments, especially in old age.

The global unadjusted gender pay gap now stands at 68.5%. Recently, the pay gap has decreased most rapidly in Global South countries. In the European Union, there has been little change in the gender pay gap in the 21st century. In the United States, the pay gap has likewise held steady, although in 2023 the pay gap actually increased across all age groups, as men's wages have increased at a higher rate than women's.

More recently, other factors (such as the burden of healthcare costs) have been incorporated in to the measurement of the adjusted pay gap. The World Bank has said that the gap increases even further when taking in to account these factors, and that previous studies may have under-estimated the size of the gender pay gap.