Gender pay gap

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The gender pay gap or gender wage gap is the average difference between the remuneration for men and women who are employed. Women are generally found to be paid less than men. There are two distinct measurements of the pay gap: non-adjusted versus adjusted pay gap. The latter typically takes into account differences in hours worked, occupations chosen, education and job experience.^[1] In other words, the adjusted values represent how much women and men make for the same work, while the non-adjusted values represent how much the average man and woman make in total. In the United States, for example, the non-adjusted average woman's annual salary is 79–83% of the average man's salary, compared to 95–99% for the adjusted average salary.^[2][3][4] The reasons for the gap link to legal, social and economic factors.^[5] These include having children (motherhood penalty vs. fatherhood bonus), parental leave, gender discrimination and gender norms. Additionally, the consequences of the gender pay gap surpass individual grievances, leading to reduced economic output, lower pensions for women, and fewer learning opportunities.

More recently, other factors (such as the burden of healthcare costs) have been incorporated in to the measurement of the adjusted pay gap.^[6] 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.^[6]

The global gender pay gap now stands at 68.5%.^[7] 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.^[8] 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.^[9][10]

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.^[11][12][13]