Understanding the mechanisms of gender discrimination in the labour market is especially important due to the influences that it may have on income inequality, education of future generations, occupational distribution, women’s position and opportunities, intergenerational inequality, and ultimately poverty. Specific to the case of Albania, this issue becomes especially important given the prospect of the country in joining the European Union. If existing issues of inequality are not considered, Albania runs the risk of increasing wage inequalities even further if women do not have the needed skills for the European markets and become even less competitive. This paper estimates the gender wage gap, and the different sources that account for such disparity. The paper finds that education is key and should be given special consideration by the policy makers, but other important sources such as occupational segregation, work experience, and child care play a crucial role