The boss and his baby

“If you work for a company run by a male chief executive whose wife is about to give birth to a child—particularly his firstborn—you might want to cross your fingers they have a daughter” reports today’s Wall Street Journal.  ” And if you’re a male worker, you might get the short end of the stick no matter the gender or birth order.”

“The gender of a male CEO’s children is significantly linked to the salary of

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his employees, according to new research from Aalborg University economics professor Michael Dahl, University of Maryland Smith School of Business professor Cristian Dezso and Columbia Business School professor David Gaddis Ross. Presented Friday at the annual American Economic Association meeting here, the analysis suggests some explanations for the linkage, but doesn’t draw absolute conclusions.

“First, the bad news. In general, when a male chief executive has a baby, his workers’ salaries shrink by 0.2%, or about $100, per year. That decline is driven by a 0.4% drop if the child is a son, according to the study of almost 1,600 births to more than 18,000 male CEOs at 10,655 private companies in Denmark between 1996 and 2006.

“But there is good news for workers: The dynamics change if the CEO and his wife have a daughter, particularly if she is their first child. Employees’ wages actually go up after the delivery of a first-born daughter. And in that scenario, female employees get the larger boost, with their salary tending to grow by 1.1%, compared with a 0.6% gain for male employees.

“In general, female workers benefit more when a male CEO has kids, regardless of the child’s gender or birth order. When a male executive has a son, female employees’ salaries shrink 0.2%, compared with a 0.5% drop for male workers. And when the son is the executive’s first child, female employees’ salaries actually go up 0.8%.

“The seemingly beneficial treatment of female workers could be because becoming a father alters a male executive’s view, particularly toward women, the paper suggests. 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 authors note. Other studies have also shown that men sometimes care more about other people’s well-being after having a daughter.”

For more, see: http://online.wsj.com/article/SB10001424127887324391104578225710891707312.html?mod=e2tw

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