The gender wage gap is the difference in average earnings between men and women, usually expressed as how much less women earn compared with men.
Basic definition
The gender wage (or pay) gap compares the average pay of men and women who are employed, often using hourly or annual earnings. It is typically reported as a percentage of men’s earnings, for example saying that women earn 85% of what men earn.
How it is measured
There are two common measures: an “unadjusted” gap that simply compares average earnings of all working men and women, and an “adjusted” gap that also accounts for factors like occupation, hours worked, education, and experience. The unadjusted measure highlights overall inequality in the labor market, while the adjusted measure focuses more narrowly on pay differences between comparable workers.
Examples of current gaps
Recent data show that in the United States women on average earn about 85% of what men earn in hourly pay, meaning an overall gap of about 15%. In the European Union, women’s average gross hourly earnings are about 12% lower than men’s, indicating a 12% gender pay gap. Global datasets from the International Labour Organization also show persistent wage gaps in most countries, though the exact percentage varies widely by country and over time.
Main causes
Research links the gender wage gap to multiple factors, including occupational segregation (women more often working in lower-paid sectors), discrimination and bias in pay and promotion, and differences in unpaid caregiving responsibilities that affect work hours and career progression. Even after accounting for measurable factors like education and experience, studies typically still find a remaining gap that suggests unequal treatment in the labor market.
Why it matters
The gender wage gap is widely used as an indicator of gender inequality because it shows how economic rewards differ by gender across the workforce. It affects women’s lifetime earnings, savings, and pensions, and can also influence business outcomes by limiting how fairly talent is compensated and retained.
