Gender Pay Gap Increases with Age among All Educational Backgrounds

Fiona Herrmann and Katharina Wrohlich

DIW Weekly Report, 2025, vol. 15, issue 18/19, 109-115

Abstract: The average gender pay gap in Germany is 16 percent according to the most recent data. On the occasion of the 2025 Equal Pay Day, this Weekly Report using Socio-Economic Panel (SOEP) data shows that considerable differences according to age and level of education are hiding behind this average gap. For example, the gender pay gap increases significantly with age for people of all educational backgrounds and increases the most for older employees with a university degree. This age pattern is much more pronounced in the west of Germany than in the east. If policymakers want to counteract the large gender pay gap, they must create incentives for a more equal division of paid and care work between women and men. Starting points include reforming the joint income taxation of married couples (Ehegattensplitting) and the tax treatment of income from mini-jobs. Currently, these two factors make part-time or marginal employment financially attractive for married women, at least in the short term, thereby reinforcing existing gender-specific labor market inequalities.

Keywords: Gender Pay Gap; Wage Inequality; Life Cycle; Education; Part Time Work; Gender Inequalities (search for similar items in EconPapers)
JEL-codes: J16 J22 J31 (search for similar items in EconPapers)
Date: 2025
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DIW Weekly Report is currently edited by Tomaso Duso, Marcel Fratzscher, Peter Haan, Claudia Kemfert, Alexander Kritikos, Alexander Kriwoluzky, Stefan Liebig, Lukas Menkhoff, Karsten Neuhoff, Carsten Schröder, Katharina Wrohlich and Sabine Fiedler

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