The Persistence of the Gender Wage Gap in Germany

Abstract

The gender wage gap is remarkably persistent in Germany. Additionally it is among the European Member states one of the highest. The paper examines the empirical data which allow analysing the gender wage gap; it discusses the development of the gender pay gap over time, the trends in wage inequality and the incidence of low pay. As institutional factors are of certain importance, the paper describes the overall system of wage determination, especially the minimum wage regulations. Important is the treatment of gender way gaps in the equal pay legislation to date, which is analysed in detail. As firm level decisions are of great importance to constitute the gender wage gap, this aspect is discussed, too. The paper summarizes the actual state of the art in empirical studies on the gender pay gap in Germany and comes to the conclusion that relevant factors to explain the persistence are mainly structural factors like vertical and horizontal segregation, especially in the work place. Individual characteristics of women and men (human capital endowments) do play a minor role, but are still existent.