Wage inequalities are argued to be associated with a difference in the education and productivity of workers: workers with a higher education earn higher wages ceteris paribus because they are more productive. However, this explanation has been challenged by empirical and theoretical research on labour markets. Recent literature has found other mechanisms that explain pay inequality such as distinct social processes or firms’ strategies to address market distortions. The abundance of theories is, nevertheless, not matched by a corresponding body of empirical literature. This paper seeks to fill the gap by analysing Belgian linked panel data. Findings show that educational level has a higher impact on productivity than on wages. It is especially pronounced in the case of younger and female workers. This empirical paper, thus, finds evidence of the effect of workers’ gender and age on the (mis)alignment of wages across educational groups. In addition, the authors argue that female low-income workers are more affected by labour market regulations such as minimum wage requirements or unemployment benefits.