Is your CEO about to become a father? If you’re a woman employee at his company, you should hope the newborn is a girl.
Professors Michael Dahl of Aalborg University in Denmark, Cristian Dezsö of the University of Maryland’s Robert H. Smith School of Business, and David Gaddis Ross at Columbia Business School recently completed a study of the gender pay gap in the Danish workplace.
Worldwide, women earn an estimated 9 to 18 per cent less than men with the same job descriptions and equivalent education and experience. Denmark, despite being considered a relatively egalitarian society, still has a wage gap. It’s also the ideal place to study wage gaps, because the government keeps very thorough demographic statistics on its population and on every Danish company.
Earlier research suggested that US legislators who have daughters tend to vote more liberally on women’s issues, especially issues of reproductive rights. So the researchers thought a male CEO who had a daughter would be more likely to try to narrow the wage gap at his company. “There is something about a female child,” says Ross, “that makes these issues more salient to male CEOs.”
Shortly after the CEOs had daughters, the women’s wages at their companies began to rise relative to men’s, shrinking the wage gap.
- First daughters who were also firstborns had the biggest effect. These girls helped close the wage gap at their dads’ companies by three per cent.
- First daughters who were not firstborns still helped narrow the wage gap. At companies headed by their dads, the wage gap closed by 0.8 per cent.
- Most of the gains in wages were found at smaller firms, or those with 10-50 employees. (Firms with fewer than 10 employees were not included in the study) The researchers believe this is because at smaller companies, CEOs have more influence over the pay of individual employees. The birth of any daughter at these firms shrunk the wage gap by about 1%.
- Highly-educated women employees benefited more than others. Since most CEOs are highly educated, it makes sense that they would see well-educated women as potential proxies for their own grown daughters. Among college educated women, the birth of a daughter (firstborn or not) closed the gender gap by about 1%.
Do you believe there is a wage gap at your company? If so, how important do you think the CEO’s outlook could be in closing it?
NOW WATCH: Ideas videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.