The cause and consequences of the situation are commented on by researchers from the Faculty of Economics and Business Administration at Vilnius University.
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According to Eurostat data, in 2024 the largest unadjusted gender pay gap for men and women in the European Union was recorded in Estonia (18.8%) and Latvia (13.9%), while the EU average was 11.1%. The smallest – even negative – gap was found in Luxembourg (-0.8%), where women earn on average more than men.
Why is the pay gap a problem?
Professor Jelena Stankevičienė notes that the gender pay gap has a complex negative impact – both on women themselves and on the country’s economy and society. This gap reduces women’s lifetime earnings, which directly affects their pensions and opportunities to accumulate additional pension savings. In 2025, the gap between women’s and men’s state social insurance old-age pensions was 12.7%.
The main cause – the “motherhood penalty”
One of the most important reasons is the so-called “motherhood penalty”. After having a child, women more often take career breaks, use parental leave for longer periods, and more frequently work part-time. This slows their wage growth, limits the accumulation of professional experience, and opportunities for career advancement. After the birth of the first child, women’s incomes decrease and, although they recover somewhat later, they never catch up with the income growth rates of childless women or men with children.
A study conducted by Dr. Nerijus Černiauskas reveals that in the Baltic countries (at least until the COVID-19 period) the motherhood penalty was particularly pronounced, especially in the first years after the child’s birth. After having a child, women’s work income rapidly decreases, starts to grow again from the second year, but does not reach the pre-birth level. Meanwhile, men’s incomes do not decrease and often even increase from the second year. This creates an increasing gap between men continuing their careers and women dedicating a large part of their time to childcare.
The study also shows that this effect is stronger in Lithuania than in the Netherlands, Denmark, Norway, Sweden, or Finland. Although there are several reasons why the motherhood penalty is more pronounced in the Baltic countries – longer parental leave, fewer opportunities to start attending kindergarten or nursery early – the main factor is considered to be the value-based attitude. In the Baltic countries, it is more often believed than in the Nordic countries that women should take care of children, and fathers should work, and it is also more often believed that the child will be worse off if the mother works instead of taking care of the child herself. However, these attitudes in the Baltic countries are gradually changing, so it is likely that income disparities will decrease over time.
Each child means a smaller pension
Associate Professor Dr. Jurgita Butkevičienė points out that each child raised reduces the mother’s future pension, so women should prepare for this in advance. The relationship between the number of children and pension size is clearly shown by a 2025 study conducted by the German institute DIW Berlin: it found that women’s accumulated pensions are generally more than 32% lower than men’s, and this gap increases depending on the number of children. Women raising one child receive 10.2% less pension than childless women, mothers of two children receive 14.8% less, and those raising three or more children receive as much as 25.9% less.
“Pension inequality arises due to several intertwined reasons – career breaks for childcare, the wage gap, more frequent part-time work, and the fact that women more often work in lower-paid sectors,” explains the associate professor. “When talking about the gender income gap, we often look at today’s salary, but the consequences accumulate over decades. One example in Lithuania can be the accumulation of second-pillar pensions.
While working, the personal contribution is 3% of the salary, which the employer deducts from the salary and transfers to the pension system; the state also contributes an incentive payment. However, during the childcare period, this 3% personal contribution is not calculated from the received benefit, so only a fixed amount set by the state is transferred to the fund at that time. Over time, such periods, especially when repeated with several children, reduce the total accumulated amounts.
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It is also important to see that women more often take on not only raising children but also caring for aging parents. Some women become part of the so-called “sandwich generation,” caring for both children and parents at the same time, which often means reduced workload or career breaks due to caring for relatives.
Finally, policy consistency is very important. Families make long-term decisions, but Lithuania’s experience in 2009–2010 showed that sudden changes in benefits can fundamentally change families’ plans and financial security. Some of these decisions were later reviewed by the Constitutional Court. Therefore, to reduce the pension gap, it is important to talk not only about individual decisions but also about stable, predictable family and social policy.
The economic cost – hundreds of billions of euros
According to the European Commission’s assessment, the gender employment gap causes the European Union to lose about 370 billion euros annually. Therefore, actions in this area are important not only socially but also economically – better gender equality by 2050 could increase the EU’s GDP by up to 3.15 trillion euros.
How to reduce the pay gap and the impact of the “motherhood penalty”
First, promote equal parental leave models, where parents, especially men, are encouraged and have the opportunity to use non-transferable parental leave, making childcare a shared responsibility rather than just the “mother’s role.” This reduces employers’ assumptions that only women will “drop out” of the labor market.
Second, apply flexible working conditions as widely as possible for both parents. This can include the possibility to work remotely, flexible working hours. The culture of work-family balance should be accessible to all employees, not just mothers. Such an environment allows parents to share responsibilities and avoid a one-sided burden on women.
Third, transparency and pay monitoring, where companies and organizations continuously monitor and analyze salary data by gender and parental status to see the real difference and be able to reduce it with targeted measures.
Fourth, reducing stereotypes. Education and communication should change society’s attitude that parenting is the responsibility of both men and women, and motherhood should not reduce professionalism or motivation.
Fifth, creating a culture of inclusion and equal opportunities, mentorship programs for returning mothers, ensuring their career continuity and growth.
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