The aim of this study was to assess the impact of the wage cuts on the gender pay gap in Serbia since the women wages could be, overall, more affected by the austerity measures. The other aim of this research was to investigate into more details the changes in the size of the gender pay gap at different parts of the wage distribution, as well as the changes in the gap across different sectors and occupations. Also, the aim of this project was to estimate the labor market transition due to austerity measures and the extent to which they influence the gender pay gap because with reduction in wages public sector could become less attractive to workers and they might decide to move to the private sector.