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HindustanTimes Fri,11 Jul 2014

Freakonomics? Your boss’ firstborn may affect your salary, says study

PTI  Washington, January 07, 2013
First Published: 21:56 IST(7/1/2013) | Last Updated: 10:36 IST(8/1/2013)

Your salary may rise or shrink depending on your male boss' firstborn, according to a new study which found that employees can expect a hike if the child is a daughter but salaries may decrease if it is a son.

The gender of a male CEO's child is significantly linked to the salary of his employees, according to research presented at the American Economics Association annual meeting, The Wall Street Journal reported.

Research 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 found that 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.

However, the dynamics change if the boss 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 by 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 study suggested.


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