Like Daughter, Like Father

When male CEOs have daughters, relative pay for women at their firms goes up, narrowing the persistent gender wage gap.
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The gender wage gap is a well-documented, persistent, and worldwide phenomenon wherein women earn, on average, an estimated 9 to 18 percent less than men who have the same job descriptions and equivalent education and experience. After a steady decline that began in the 1970s, the gap has remained constant since the early 1990s.

Remarkably, the gap persists even in otherwise highly egalitarian nations like Denmark. Despite its well-deserved reputation for egalitarianism in both the public and private sectors, particularly when it comes to questions of gender equity, Denmark has not been able to overcome the virtually universal phenomenon that is the gender wage gap.

That Denmark experiences wage inequities comparable to other countries makes it an ideal setting to study the wage gap, says Professor David Gaddis Ross, whose research on strategic decision making has included examining gender equity in corporate settings. “Not only does the Danish government keep comprehensive demographic statistics on its entire population, including every Danish company, but also, if the gap is still occurring in such an egalitarian society, that suggests the gap is not the intentional result of policy,” Ross says. “It suggests that the gap may arise due to social and psychological factors.”

What sort of social and psychological factors? A good deal of social science research supports the idea that men’s attitudes toward women and gender equity are affected by the gender of their children. “The idea is that a father who has daughters may become more sympathetic and understanding toward women’s issues — and that these issues may become more salient to a man who was already sympathetic to them,” Ross explains. It follows that if a male CEO has a daughter, he may be motivated to implement wage policies that narrow the wage gap.

Ross worked with Michael Dahl of Aalborg University in Denmark and Cristian Dezsö of the University of Maryland to look at each employee of each firm in relation to that firm’s CEO both before and after that CEO had a daughter. The researchers excluded heavily regulated industries that might be subject to strict oversight that would minimize or eliminate the wage gap, and they excluded very small firms because of missing data. The study focused exclusively on male CEOs rather than female CEOs: men account for over 90 percent of the CEOs in the authors’ study and an even larger proportion of the CEOs of large companies around the world, while female CEOs would presumably already be attuned to possible gender wage inequity, consciously or not, by virtue of being women.

Ross and his coresearchers found that, indeed, a short time after male CEOs had daughters, women’s wages rose relative to men’s, shrinking the gender wage gap at their firms. The birth of a son, in contrast, had no effect on the wage gap. First daughters who were also the firstborn children of a CEO had a bigger effect than subsequent daughters, decreasing the gap by almost 3 percent. First daughters who were not the firstborn children of the CEOs had a less dramatic but still significant effect, closing the gap by 0.8 percent. The overall reduction in the gender wage gap was 0.5 percent.

That makes sense. “What wouldn’t make sense is if the first eight daughters had no effect and then suddenly a CEO has his ninth daughter and starts putting policies in place at his firm that close the gender wage gap,” Ross continues. “Either something happens from having a female child that makes a male CEO more attuned to these issues or it doesn’t. It is not an effect that we would expect to keep going up and up.”

The researchers also found that these effects were strongest at firms with 50 or fewer employees, which they attribute to the fact that CEOs at smaller firms are typically more directly involved in making decisions that affect the pay of individual workers than CEOs at much larger firms.

The effects were even stronger for employees with more education. “You would expect this given the potential for vicarious identification. Most CEOs went to college and have more formal education than the average person; they also expect their daughters to be educated,” Ross explains. It follows that CEOs may be more apt to see their more educated women employees as resembling a possible future incarnation of their daughters.

Because nature randomly determines the gender of each child and gender-motivated abortion is so rare in Denmark, the study approximated a randomized lab experiment in a way few studies can. And, the researchers applied research methods that allowed them to eliminate other variables in the employer-employee relationships that could be behind the rise in women’s wages.

Therefore, while the researchers did not directly observe the subjects of their study, the research design does point to a causal relationship between the gender of a male CEO’s children and the gender wage gap at his firm. “There is something about a female child,” Ross says, “that makes these issues more salient to male CEOs.”