By Allianz Research

Women have made measurable progress over recent decades in narrowing gender pay gaps and increasing labor-force participation – but structural gaps persist. Across the OECD, the unadjusted gender pay gap – the percentage difference between the average earnings of all men and all women without accounting for differences in job type, hours worked, experience or seniority – has declined from 21% in the early 2000s to 13.7% in 2024, and female labor-force participation has risen steadily to 71%, compared with 81% of men. However, single metrics do not capture the full economic impact of these gender disparities as important structural differences remain: women continue to work fewer paid hours, experience more career interruptions and receive on average 23.7% lower pension income than men.

It’s about more than equal pay: What ultimately matters is total income over the lifecycle. Lower earnings during working years reduce savings capacity, investment returns and pension entitlements. To measure this cumulative effect, we develop an integrated lifecycle model that combines labor income, capital income and pensions into a unified lifetime income measure, tracing women and men born in 1975, 2000 and 2025 across major OECD countries. Our results show that lifetime income gaps across the 14 analyzed countries declined markedly across cohorts: from roughly 33% for those born in 1975 to 16% for the 2000 cohort. This lifetime income gender gap is driven primarily by labor income (79%), followed by pensions (16%) and capital income (5%). Assuming a continuation of current structural trends, progress looks set to stall, with the lifetime income gap still at 16% for those born in 2025.

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