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March 15, 2011 Practice Points

Study Links Gender Wage Gap and Birth of Daughters to CEOs

By Sara E. Dionne

A recent study entitled "Like Daughter, Like Father: How Women's Wages Change When CEOs Have Daughters" and conducted by professors at Columbia University, Aalborg University in Denmark, and the University of Maryland, has found a relationship between the gender wage gap and a company's Chief Executive Officer (CEO) having a daughter. The study examined statistics maintained by the Danish government about Danish companies over a 12-year period. Looking at the time period before and after the birth of a daughter, the researchers found that within a short period after the birth of a daughter to a CEO, the wage gap between male and female employees at that CEO's company was reduced. No similar reduction was found upon the birth of a son. Interestingly, the researchers noted that the effect of the birth of a daughter was related to the birth order of the child. The most significant effect was observed when the daughter was the firstborn child, reducing the wage gap by nearly 3 percent. When the CEO had a daughter who was not his firstborn child, the wage gap reduction was less dramatic, narrowing by only 0.8 percent. Stronger results were observed at companies with less than 50 employees and with employees with more education.

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Keywords: gender, pay, wage gap, CEOs, daughter, birth

Sara E. Dionne works at Orrick, Herrington & Sutcliffe LLP in Sacramento, California.

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