Fingers crossed your CEO has a daughter

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Your CEO’s children – specifically their gender – influences how much you and your colleagues are paid. Three professors from Aalborg University presented this finding at the annual American Economic Association’s annual meeting, as reported by the Wall Street Journal.

To begin with the bad news, it turns out that if a male CEO has a baby his employees’ salaries will, generally, shrink by 0.2%. If the child is a son, this drop increases to 0.4%.

Interestingly, however, the effect of the CEO’s procreation is mitigated if you are a woman. When a male CEO has a son, female employees’ salaries shrink by 0.3% less than those of their male counterparts (0.2% vs 0.5%). In addition, if the CEO’s son is his first child, then women’s salaries actually increase by 0.8%!

On the other hand, there is good news for both men and women when the CEO has a girl child. When the daughter is the CEO’s first born, female employees’ will see their salary increase by 1.1% and male employees’ will benefit from an extra 0.6%.

One possible explanation is that having children changes a male CEO’s outlook – and particularly his perspective on women. “Previous research shows men’s esteem for their wives often rises when they become mothers and this shift may nudge male executives to also view their female employees as more competent,” the Wall Street Journal reported.

Whatever the explanation, it is an interesting example of unusual gender discrimination, and one that might point a way forward to closing the gender pay gap.

***The study involved the analysis of 1,600 births to more than 18,000 male CEOS in Denmark between 1996 and 2006.

  • Les on 11/01/2013 6:46:17 PM

    Yes, but was there sufficient randomisation of the test population and was the sample size large enough to make the results statistically significant? Were the results tested against a control group?

    Regards, Les Allan
    Managing Director
    Business Performance Pty Ltd
    www.businessperform.com

  • Yvonne Walker on 14/01/2013 1:33:05 PM

    A sample size of 1600 births and 18000 CEO's would have to be regarded as statistically significant. As 18000 CEOs can't have only 1600 children, the remainder of the CEO group would be regarded the control group.
    Interesting findings....

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