A History of the Gap and How We Measure It
The gender pay gap has deep historical roots in the gendered division of labor and societal norms regarding women’s participation in the workforce. To begin with, equal pay legislation has been implemented in many countries—with the ILO Equal Remuneration Convention dating back to 1951—yet implementation gaps and structural barriers have limited progress1. During its tracking period since 2006, the World Economic Forum has found that while some improvement has occurred, the pace of change remains frustratingly slow2. The global gender gap score in 2023 stood at 68.4% closed, representing only marginal improvement from 68.1% in 20222. Examining the constant sample of 102 countries covered continuously from 2006 to 2023 reveals that the gap stands at 68.6% closed, demonstrating the persistent nature of this inequality2.
Measurement of the gender pay gap typically occurs as the difference between median or average earnings of men and women relative to men’s earnings. This can be calculated as either an “unadjusted” gap (comparing all workers regardless of position or qualifications) or a “controlled” gap (comparing workers in similar positions with equivalent qualifications)3. The unadjusted gap provides insight into structural inequalities in the labor market, while the controlled gap can identify potential discrimination within specific contexts. In 2025, the global uncontrolled gender pay gap stood at 0.83, meaning women earned 83 cents for every dollar earned by men, while the controlled gap was narrower at one cent difference3.
Regional Contours and Developmental Influences
Significant variation exists in the gender pay gap across countries and regions, reflecting different economic structures, policy environments, and cultural norms. At the outset, across OECD countries, the average unadjusted gender pay gap stands at 11.9%, meaning the median full-time working woman earns about 88 cents to every dollar earned by men4. Within the European Union, the gap ranges from less than 5% in countries like Luxembourg, Romania, and Slovenia to over 17% in Hungary, Germany, Austria, and Estonia5. Luxembourg notably has achieved a negative gender pay gap of -0.7%, indicating women earn slightly more than men on average65.
In high-income countries, the Netherlands, Republic of Korea, and United Kingdom show larger gaps, while some Eastern European countries like Slovenia and Hungary demonstrate smaller differentials71. Among upper-middle-income countries, Armenia, South Africa, and Russia show relatively smaller gaps, while Jordan and Thailand have larger disparities1. Lower-middle-income nations demonstrate significant variation, with Pakistan having one of the largest gaps while the Philippines shows a smaller differential1.
The relationship between economic development and the gender pay gap presents complexity. Some economically advanced nations maintain substantial pay gaps, while certain developing economies show greater wage parity. This suggests that economic growth alone does not guarantee progress toward gender pay equality1. Rather, specific policy choices, cultural attitudes, and institutional structures play crucial roles in determining the extent of gender-based wage disparities89.
Key Drivers Perpetuating the Pay Gap
Horizontal and vertical occupational segregation remain major drivers of the gender pay gap. At the forefront, women are disproportionately concentrated in lower-paying sectors and positions, while men dominate higher-paying fields and leadership roles10. Research indicates that approximately 60% of firmly-attached workers consistently remain in gender-typed occupational groupings, reinforcing sectoral segregation over time10. The decline in occupational segregation has been strongly correlated with improvements in women’s earnings—between 1960 and 2008, approximately 60% of real wage growth for Black women, 40% for White women, and 45% for Black men can be attributed to falling levels of occupational segregation10.
One of the most significant contributors to the gender pay gap is the “motherhood penalty”—the wage disadvantage experienced by working mothers compared to women without children and working fathers118. This penalty accounts for approximately 80% of the overall gender pay gap according to some estimates11. Cross-national research shows that the wage penalties for motherhood vary substantially across countries, influenced by work-family policies and cultural attitudes toward maternal employment89.
The motherhood penalty stems from multiple factors, including employer discrimination, reduced work experience due to career interruptions, shifts to part-time work, and differences in job choices that accommodate family responsibilities8. Experimental research has demonstrated that employers discriminate against job applicants who signal motherhood on their resumes, offering them lower wages than equally qualified candidates without children8.
Gender differences in working hours and part-time employment significantly contribute to earnings disparities. Women work part-time more frequently than men in nearly all countries with available data, often as a consequence of taking on greater unpaid family responsibilities1. In 1989, sociologists referred to this as the “second shift”—the household and childcare duties that follow a day’s labor, predominantly performed by women11. Recent data from the UK Office for National Statistics shows women still do an average of 60% more unpaid work than men11.
Despite legal protections for gender equality in many countries, implementation gaps persist. A World Bank report found that women enjoy fewer than two-thirds the legal rights of men globally, even in wealthy economies12. While 98 economies have enacted legislation mandating equal pay for equal work, only 35 (fewer than one in five) have adopted the pay transparency measures or enforcement mechanisms needed to address pay gaps effectively12. This reveals a stark implementation gap: countries on average have established less than 40% of the systems needed for full implementation of gender equality laws12.
The Steep Costs of Inequity and the Rich Rewards of Parity
Closing the gender pay gap represents not only a moral imperative but also a significant economic opportunity. To understand the scale, PricewaterhouseCoopers estimates that fully closing the gender pay gap could add more than US$6 trillion to OECD economies’ GDP, with women’s earnings increasing by US$2 trillion1. The ILO projects that reducing the gap in labor market participation rates between men and women by just 25% by 2025 could raise global GDP by 3.9% or US$5.8 trillion1.
Beyond macroeconomic benefits, research indicates that gender diversity and pay equality correlate with improved business performance. Companies with greater gender diversity tend to outperform their less diverse counterparts, suggesting that addressing pay equity can yield competitive advantages1. Moreover, closing the gender pay gap can create a virtuous circle by providing incentives for more women to be economically active, which in turn advances gender equality and economic growth1.
Policy Levers and Strategic Interventions
Increasing numbers of countries are implementing pay transparency measures to address gender pay gaps. These include requirements for companies to report gender pay data, conduct equal pay audits, and implement gender-neutral job classification systems413. The OECD has committed to helping countries understand and implement these tools, recognizing their potential to identify and address wage disparities4.
Cross-national research indicates that certain family policies have significant impacts on reducing motherhood wage penalties89. Publicly funded childcare for children aged 0-2 is strongly linked to lower wage penalties for mothers9. Job-protected parental leave shows a curvilinear relationship with motherhood penalties—very short or very long leaves are associated with higher penalties, while moderate-length leaves help mothers maintain labor market attachment9.
Policies supporting fathers’ engagement in childcare, such as paternity leave and shared parental leave, are associated with smaller motherhood wage penalties9. These policies help redistribute caring responsibilities more equitably between parents and challenge gender norms around care work9.
The cost and availability of childcare significantly impact women’s ability to participate equally in the labor market. The UK holds the dubious distinction of ranking highest among OECD countries for childcare costs proportionate to women’s salaries11. A recent report showed the average annual cost of a full-time nursery place for a child under two in Great Britain is now £14,836, increasing by 5.9% in the past year11. Making childcare more affordable and accessible represents a critical intervention for reducing gender pay inequality.
A Doughnut Economics Perspective on a Just and Sustainable Future
Within the Doughnut Economics framework, the gender pay gap represents a failure to meet the social foundation requirements of income equity and gender equality. When women earn substantially less than men, their ability to meet basic needs and achieve economic security is compromised. This inequality undermines several Sustainable Development Goals, particularly SDG 5 (Gender Equality), SDG 8 (Decent Work and Economic Growth), and SDG 10 (Reduced Inequalities).
Beyond social foundations, the gender pay gap also carries implications for planetary boundaries. Research shows that greater gender equality, including economic equality, correlates with more sustainable environmental practices and policies. Women’s economic empowerment can lead to more balanced resource allocation within households and communities, potentially supporting more sustainable consumption patterns.
Addressing the gender pay gap through a Doughnut Economics lens requires integrating policies that simultaneously address social needs while respecting ecological boundaries. This means designing interventions that promote gender pay equity in ways that also support sustainable economic models rather than treating them as separate challenges.
This integrated approach manifests through several key strategies. Investment in care infrastructure, including childcare and elder care facilities, creates decent jobs while enabling more equitable labor market participation for women who traditionally shoulder these responsibilities. Supporting transitions to green economies must ensure women have equal access to emerging jobs and opportunities, preventing new sectors from replicating existing gender disparities. The implementation of progressive taxation systems reduces overall inequality while generating revenue to fund social services that support gender equality.
These interconnected strategies acknowledge that economic and gender justice must develop in tandem with environmental sustainability, reflecting the core principles of Doughnut Economics where social foundations are secured within ecological boundaries. The path toward gender pay equity thus becomes inseparable from the broader movement toward a more sustainable and just economy.
Pathways to Parity
The gender pay gap represents a persistent challenge to achieving both economic justice and optimal economic performance globally. Current data shows that despite modest improvements, substantial inequalities remain, with women earning approximately 77-83 cents for every dollar earned by men. The causes are multifaceted, including occupational segregation, the motherhood penalty, differences in working hours, and implementation gaps in equality legislation.
Countries making the most progress in closing their gender pay gaps have implemented comprehensive approaches that combine pay transparency measures, accessible childcare, balanced parental leave policies, and cultural shifts supporting maternal employment. The economic case for closing the gap is compelling, with potential global GDP gains of trillions of dollars.
Viewed through a Doughnut Economics framework, addressing the gender pay gap is essential for creating a safe and just space where all people can meet their needs while respecting planetary boundaries. Until meaningful wage equity across genders is achieved, economic systems will continue to underperform both in terms of justice and efficiency.