Babies are awesome for many reasons: Cuteness. Giggles. The future existence of the species. But how about for getting you a raise? New research from three economists suggests that male CEOs pay their female employees more when they have a baby, and baby daughters mean the biggest boost.
Overall, the research finds that the gender of male CEO’s children is significantly connected to how much he pays his employees. The details are even weirder: If a male CEO’s wife is pregnant, and gives birth to a boy, his workers’ annual salaries decrease by 0.4%, or about $200 a year. But if the wife gives birth to a baby girl, salaries rise — and female employees benefit the most. The effect is even more dramatic if the baby girl is the couple’s first child. In that case, female workers see their salaries rise by 1.1%, with male employees benefiting by 0.6%.
Overall, female workers benefit the most whenever a male CEO has children. When the company leader has a son, his male employees’ salaries drop more than twice as far as women’s. And if that son is a firstborn, female salaries rise by 0.8%.
The economists looked at data from more than 18,000 male CEOs in Denmark between 1996 and 2006, a period that included almost 1,600 births within the group’s families. Their paper was presented this weekend at the annual meeting of the American Economic Association.
As the Wall Street Journal explains, the paper offers a tentative theory on why salaries might be affected by a male CEO’s fatherhood. It’s possible, the paper suggests, that having children changes an executive’s outlook, particularly toward women. Previous research demonstrates that men develop more respect for their wives when they have children, so perhaps this same effect causes CEOs to view their female employees more favorably.
Can’t you picture a zany workplace comedy about this research? A diverse group of female employees, fed up with being paid less than their male peers, hatches a plan to convince their boss that it’s time to have a baby. Hijinks ensue. Hollywood: Call me!