We study the drivers of the life-cycle gender wage gap. In our equilibrium search model, firms set the unit price of human capital of men and women, value stable matches with high productivity gains and can statistically discriminate across genders based on differences in turnover and human capital processes. This endogenous wage setting is crucial for evaluating policies targeting the gap. We estimate the model on the first 15 years of workers’ careers in the NLSY79 data, and find that differences in workers’ and firms’ productivities explain 27% and 28% of the life-cycle gap respectively, while statistical discrimination explains 45%.