Gender Income Gap Over Life-Cycle: Cross-Country Analysis

Despite the vast literature on the gender disparities in the labor market participation and outcomes, there is a scarce literature on the gender gap in total income. This paper tries to fill the research gap and has threefold contribution to the existing literature. First, the paper studies the gender gap in aggregate income instead of focusing only one component – wages. Second, the analysis of the gap in four age categories reveals how the income gap behaves throughout the “life-cycle”. And three, the gap is analysed in 25 countries that allows observing the institutional differences that are not apparent in case of single-country study. In most countries the unexplained median total income gap is the lowest among the youngest and increases throughout the life-cycle. However, there are countries, where the gap peaks in the youngest age group, for example, in Bulgaria. There is a large heterogeneity among countries in the unexplained gap size. Among the working age people, the unexplained median income gap is above 70% in Greece, while the lowest gap, approximately 4%, is reported in Slovenia. The paper suggests that trade union membership reduces and minimum wages increase the unexplained income gap of low-income individuals below age 45. More generous maternity leave increases it for low-income individuals between age 25-44, while formal child-care has negative impact throughout the distribution for the oldest. The analysis shows that "one-size-fits-all" policies are unable to respond adequately the gender gap issue in different income sources.