How your CEO's new baby could affect your pay

HRM 14 Jan 2013

The gender of your CEO’s newborn could determine how much you get paid, says new research.

Three American academics presented this finding at the annual American Economic Association’s annual meeting, reported the Wall Street Journal.

Their research revealed that if a male CEO had a baby, employees’ salaries decreased by 0.2%, a potential loss of 100 dollars a year. If the baby was a boy, the decrease was steeper at 0.4%. A possible reason could be the need to save resources and protect his family as a preventive measure against financial crisis, the authors stated in the study.

If the first born was a girl, however, employees’ wages were more likely to rise (0.6% for males, and 1.1% for females), the report suggested.

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.

The paper, written by Aalborg University Economics professor Michael Dahl, University of Maryland Smith School of Business professor Cristian Dezso and Columbia Business School professor David Gaddis Ross, involved more than 1,600 births to 18,000 male CEOs at 10,655 private companies in Denmark between 1996 and 2006.

A male CEO's salary also increases after the birth of a child – male CEO salaries rose 6.3% after the birth of a son and 3.5% after the birth of a daughter, the research said.

Leave your comment
Start a new discussion

HRM Asia forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Post a Comment
HRM Asia welcomes your contribution. Your IP address is recorded in the event of a complaint.
Name *
Email *
(required, but will not display)
Comment *
Please enter in the numbers in the box left.
You are about to submit your comment. Is it:
  • Professional
  • In your own name or pseudonym, not impersonating someone else
  • Free from rude language
  • Free from advertising
  • If you prefer not to post but are still keen to get your viewpoint across, you can always e-mail the editor.
  • 15 Apr | Starwood Asia Pacific Hotels & Resorts Pte.Ltd. | Singapore
    A Leading Hotel Chain Group
    17 Apr | Hays Specialist Recruitment Pte Ltd | Singapore
    17 Apr | Hays Specialist Recruitment Pte Ltd | Singapore
    Organisational leadership in the 21st century
    Sherman Ong, Chief Development Officer, National Cancer Centre, shares with us the core competencies required in a leader today
    Spearheading corporate democracy @ Facebook
    Tailor-make your talent strategy: Top tips from Carlsberg
    Standard Chartered : Where L&D is always evolving
    Performance Leadership Pte Ltd |
    Increase productivity and getting funding from Health Promotion Board, through a series of General Health and Mental Wellness programmes.
    Organisational Development Concepts |
    The Service Excellence Competency Frame (SVCF) is a competency-based training and assessment framework that equips service professionals with the rele ...
    Performance Leadership Pte Ltd |
    Lunch, Learn and Bond with your teams, all within 1 hour! Choose from a variety of light-hearted, interesting or thought-provoking topics that appeal ...