Pay gap: Women earn more per hour, men have higher annual salaries

In light of International Women's Day, on 8 March, the national statistics agency published figures on Luxembourg's gender pay gap. This gender pay gap indicator (known as the GPG) has always been to the disadvantage of women, but this changed in Luxembourg for the first time in 2021.

RTL Fact Check: Do women still earn less than men?

For the economy as a whole (excluding public administration), women's average hourly earnings are higher than men's. The indicator was established by Eurostat on the basis of a common European methodology.

In all other EU countries, this hourly wage indicator remains in favour of men. In most countries, the indicator has been decreasing for years, but remains largely positive in 2021.

© RTL Graphique

The first in Europe

On average in Europe, men earn 12.7% more per hour than women. Germany and France have high differences, too: 17.6% and 15.4%, respectively, compared to "only" 5% in Belgium. The highest gaps are seen in Estonia (20.5%), Austria (18.8%), with Romania (3.6%) and Slovenia (3.8%) just behind the Grand Duchy.

To date, Luxembourg is the only EU Member State where equal pay has been achieved. The GPG has continuously decreased from 10.7% in 2006 to 5.4% in 2014 and 1.4% in 2018.

With 0.7% in 2020 and -0.2% in 2021, it is highly likely that the wage gap will continue to widen in favour of women. Statec estimates -0.4% for 2022, but only the salary structure survey amongst companies held in 2023 will confirm this.

What explains this pay gap?

Women are generally better educated than men, leading to a so-called "education gap". Among employees aged between 25 and 35, women are already earning 7% more on average than men in 2018.

Furthermore, women are strongly present in high-wage industries (education, health, finance, research, legal services). However, they still remain under-represented in very high wage positions.  In Luxembourg, the wage gap between women and men has decreased more rapidly than in the rest of the European Union, as shown in the graph below:

© RTL Graphique

Annual wage still in favour of men

While this is undoubtedly a step forward, Statec highlights the limitations of this European indicator, which only takes into account hourly wages. Annual wages remain in favour of men.

The GPG also compares average wages, not wages for equal work. In fact, the annual salary of employed women is much lower than that of men as the rate of women working part-time is much higher. As a result, the number of hours they are paid for is much lower than for men (the Gender Hours Gap is around -13% on average).

Finally, significant gaps remain in many individual sectors, according to the STATEC.