Gender Pay Gap Increases with Age among All Educational Backgrounds

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.