Gender Pay Gap: "It's About How Work is Organized"

The gender pay gap in Germany remains significant, with women earning substantially less than men, according to economist Moritz Drechsel-Grau from Ludwig-Maximilians-Universität München (LMU Munich). In an interview published by LMU, Drechsel-Grau stated that women's average hourly wage is approximately 18 percent lower than men's, a slight improvement from 21 percent in 2000.

The primary driver of this disparity is the higher proportion of women working part-time, which significantly impacts annual earnings, widening the gap to nearly 40 percent. Drechsel-Grau emphasizes that the issue extends beyond gender norms and is deeply rooted in the organization of the workplace. Specifically, demanding management positions are often difficult to reconcile with family life, disproportionately affecting women's career progression after childbirth.

"When the first child arrives, women's probability of working full-time and earning accordingly takes a huge hit," Drechsel-Grau explained, referring to this as a "child earnings penalty." This penalty significantly reduces women's income for up to ten years postpartum, while men experience virtually no such impact. Comparative analyses indicate that Germany and Austria have higher "child earnings penalties" than, for instance, Scandinavian countries, partly due to inadequate childcare options and societal norms.

The income disparity is even more pronounced for self-employed women and entrepreneurs compared to their male counterparts. In 2016, the average income for a self-employed man exceeded 100,000 euros, while a self-employed woman earned just under 50,000 euros. Drechsel-Grau advocates for structural changes in the workplace and policy interventions to better support the career development and equality of working parents, particularly women.