Do Daughters Help Ease Gender Pay Gap?
Researchers have found that wage differences within a company decrease when something seemingly unrelated to the workplace occurs: when male CEOs have daughters. Three economists studied the salaries of some 734,200 Danish workers at 6,230 firms, from 1995 through 2006. The data set also included information on CEOs, including the sexes and birth dates of their kids. (More details on the study can be found in this WSJ piece and on our fellow blog, Ideas Market.)
The researchers found that when male CEOs had daughters, the wage gap closed by 0.5 percentage points, on average, at their firms in the same calendar year, and if a CEO’s first born happened to be a daughter, the wage gap closed by nearly 3 percentage points. (Overall, Denmark has a gender wage gap of 21.5%, unadjusted for hours worked or rank.) The birth of a son, however, had no effect on the wage gap. And the researchers found no changes in the relative wages of women and men when female CEOs had children.
The professors who performed the study — David Ross of Columbia Business School, Michael Dahl of Aalborg University in Denmark and Cristian Dezsö of the University of Maryland’s Robert H. Smith School of Business – proposed that having a daughter could make male CEOs more sensitive to gender issues. “Our results suggest that the first daughter ‘flips a switch’ in the mind of a male CEO, causing him to attend more to equity in gender-related wage policies,” the authors write.
I’ve found that this has much more to do with the individual and the co-owner(s) of the firm, (usually the wife) than it does with the gender of the children. Make sure you find out who exactly owns the firm before signing on and if the wife owns half, make sure that you carefully evaluate her before making a decision to join the organization.
We must admit, changing the gap clearly is a challenge. According to studies, more women attend college than men, and they tend to graduate with higher grade points. Still, says a new report from the American Association of University Women, one year after graduation they earn an average of only about 82 percent of what men earn with the same level of education. The report found a similar disparity in nearly every major occupation it tracked.