Women in the German Economy: A Long Way to Gender Equality (NR Session 4)

By Theresa Neef (Freie Universität Berlin)

This research was presented in the fourth New Researcher Online Session: ‘Equality & Wages’.

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Female employees in the European Union (EU-27) earn, on average, about 85 per cent of the wages received by male employees. While some countries such as France and Sweden exhibit closer pay equality, women in Germany face a larger gap and receive just 79 per cent of the average male wage, according to the 2018 results from Eurostat 2020. How did this state of affairs emerge?

To understand contemporary pay inequality, it is vital to take a long-run perspective and look at the development of the gender pay ratio in Germany since 1913.  An in-depth analysis of historical inquiry reports and publications by the statistical offices reveals that in 1913 women in Germany earned around 44 per cent of male wages. Although  World War I led to a temporary increase in women’s pay in blue-collar occupations, this trend was soon reversed and the gender-segregated labour market was re-established following demobilization.

The interwar period brought about the most dynamic leap in gender relations during the 20^th century. While in 1920 German women earned on average 45% of a man’s average pay, by 1937 this share had increased to 61%, a consequence of women’s occupational transition and the more progressive institutional framework adopted during the Weimar Republic.

With the growing number of white-collar jobs, young females had job opportunities that were better paid and more socially accepted than the work in low-paid domestic services or agriculture. That was an opportunity they took: from 1910 to 1960, women increased their share in those fast-growing occupations from 18% to 45%, while their share decreased in agricultural work. This trend most likely contributed to women’s wage gains relative to men.

During the Weimar Republic, a new constitution and a more progressive institutional framework fostered further equalization of earnings, especially in the white-collar occupations. In 1919, the Weimar constitution introduced compulsory schooling for all youths under 18 years irrespective of gender. For the first time, this law provided girls with the same chances to receive vocational education and an apprenticeship as their male peers. All youths that worked in commercial and industrial firms were obliged to attend vocational commercial school at least once a week for two to three years.  Before the introduction of this law, employers hardly invested in girls’ apprenticeships because women were seen as transient employees leaving the labour force upon marriage. This non-gendered schooling obligation led to a dynamic convergence of vocational training between boys and girls.

In the post-1945 period, the gender pay gap decreased in Germany from 65 percent in 1960 to 74 per cent  twenty years later. In contrast,  Sweden took the lead among European countries and by 1980, the gender pay gap was just 14 percentage points. However, since the 1980s, the gender pay gap has stagnated in many European countries.

All in all, the long-run perspective shows that since the beginning of the 20^th century Germany has persistently exhibited a lower gender pay equality than other European economies, such as Sweden, despite the important improvement observed in the interwar period. In the postwar period, the gap between Germany and Sweden widened further due to slower progress in the young Federal Republic. These results suggest that differences in gender pay inequality across countries can be traced back to historical roots that go beyond the developments in the past forty years.