Male CEOs With Daughters Place Higher Value on Female Employees
Over the years, I've heard explanations and justifications for the phenomenon known as the gender wage gap. One popular explanation revolves around the argument that men are much more likely to negotiate their starting salaries, and to ask for pay raises more aggressively than women. Additionally, it is argued that the risks and costs associated with female employees who may at some point seek temporary or permanent maternity leave, justify paying women less than men. Whatever the case may be, worldwide, women earn salaries that are between 9 and 18 percent less than their male counterparts who have the same job descriptions and possess identical qualifications.
So what's a professional woman's best bet for avoiding the gender wage gap in her own career? According to a new study out of Columbia Business School, male CEOs who have daughters are more likely to pay their female employees more. The study, which examined the salaries of 734,200 workers at 6,320 firms, from 1995 through 2006 in Denmark, found that:
[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.
[...]
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.
(h/t WSJ's Ideas Market)
- Comment (42)
- · Quote
- · UnfollowFollow (2)
Comments :
Jul '10
Re: Male CEOs With Daughters Place Higher Value on Female Employees
Sorry, Diane, but this just won't wash.
Compensation systems aren't the purview of CEO's. They are designed by compensation specialists within the human resources discipline. Each position - defined by job descriptions published by the federal Department of Labor - is assigned a distinct salary range. Those ranges are established by a very arduous and expensive process of studying industry norms. Where an employee's compensation falls within that range is determined by his or her measurable knowledge, skills and experience - what is known as his or her "KSA".
All of this happens at a level considerably beneath that of a CEO. The only time a CEO is involved is when his HR people, usually on a bi-annual basis, recommend an increase in compensation ranges.
As for the reason that women make less than men, it's easily explained by two facts: First, that women take more time away from the workplace - and work fewer hours within the workplace - than men. And secondly, that men are, in general, more aggressive about asserting their economic worth to the organization than are women.
Edited on Mar 3, 2011 at 12:11pmNov '10
Re: Male CEOs With Daughters Place Higher Value on Female Employees
What in the world are you talking about? First, I guess you mean “salary” and not “wage” since professionals are by and large salaried and do not work for wages. There is a gender salary gap, but it favors women so they have no need to avoid it. They’ve won it.
Nov '10
Re: Male CEOs With Daughters Place Higher Value on Female Employees
The reason for the wage discrepancy, as I understand it, is simple. Women typically forgo promotions at work, not to mention dropping out of the workforce entirely, in order to focus on raising children. When you compare the salaries of never married women with no kids to never married men with no kids, women earn the same if not slightly more.
I would find it interesting to compare the salaries of single, childless men to married fathers. I suspect you would find that the married fathers would be payed more than their childless counterparts. Why? When you're a single guy if you have a roof over your head and food in the fridge you're fine. Do you want to work that extra, overtime shift or go out with your buddies on Friday night? Most likely you'll do the latter. If you have kids, however, you'll work longer and harder to provide for them.
The big problem with these kinds of statistical comparisons is that they pretend to compare apples to apples, when it's usually apples to bananas.
Sep '10
Re: Male CEOs With Daughters Place Higher Value on Female Employees
Interesting how that says that even worldwide the "gap" is between 9 and 18 percent. The classic feminist line has been that it is 25 percent in America.
Sep '10
Re: Male CEOs With Daughters Place Higher Value on Female Employees
I believe the study mentions the effect is most pronounced at companies with less than 50 employees. By and large they would be private and they are rare patrons of HR consulting firms or formalized systems. I agree with the observation about women and the workforce (they will often forgo promotions) but can anecdotally state that I've seen CEO's -- even in larger organizations -- go to bat against an HR comp mechanism if they felt a female employee was undervalued and in those particular cases not only they but several male board members had daughters. It goes without saying that only applies in positions that require more frequent contact with the CEO.
Also, I wouldn't discount the tenor of the times at some organizations that there are powerful incentives for some CEO's to be seen to be going out of their way to help female employees in their organizations.
Jul '10
Re: Male CEOs With Daughters Place Higher Value on Female Employees
Agreed. And in the small private companies I've worked for, the CEO often installs his daughters in cushy positions. Unless we have data that tell us how many of those higher-paid female employees are family members, we know nothing of note.
Re: Male CEOs With Daughters Place Higher Value on Female Employees
Kenneth: Sorry, Diane, but this just won't wash.
Compensation systems aren't the purview of CEO's. They are designed by compensation specialists within the human resources discipline. Each position - defined by job descriptions published by the federal Department of Labor - is assigned a distinct salary range. Those ranges are established by a very arduous and expensive process of studying industry norms. Where an employee's compensation falls within that range is determined by his or her measurable knowledge, skills and experience - what is known as his or her "KSA".
As Pseudo points out, the study says that
To use my place of employment as an example, the CEO is certainly responsible for setting salaries (which I understand have to be approved by the compensation board). But I would imagine that in a large, publicly traded company like the GAP, the CEO plays a very small or nonexistent role in this department.
Re: Male CEOs With Daughters Place Higher Value on Female Employees
TeeJaw
There is a gender salary gap, but it favors women so they have no need to avoid it. They’ve won it. · Mar 3 at 12:18pm
I think you'd have a tough time backing up this assertion with data. While women now outpace men in education, a report released this week still shows that in America "women made on average 75% as much as their male counterparts in 2009" across educational levels. (Note that the study from which I excerpt observes data from Denmark, and quotes income disparity worldwide)
Jul '10
Re: Male CEOs With Daughters Place Higher Value on Female Employees
Diane Ellis, Ed.
As Pseudo points out, the study says that
Which may be precisely why the study focused on small firms. Let us not underestimate the tendency of academics to engage in feckless, unrepresentative studies that might generate publicity.
As for the daughter factor, I once worked for a small company where the CEO's two daughters were paid at least twice their market worth.
And, though I should hesitate to mention it, there is also the "hottie" factor in small companies - particularly fetching females within the local industry happen to come to the attention of the CEO, who woos them with inordinate compensation. That isn't so common in large firms, where the hazard of sexual harassment is better understood.
Edited on Mar 3, 2011 at 12:51pmMay '10
Re: Male CEOs With Daughters Place Higher Value on Female Employees
Diane Ellis, Ed.
TeeJaw
There is a gender salary gap, but it favors women so they have no need to avoid it. They’ve won it. · Mar 3 at 12:18pm
I think you'd have a tough time backing up this assertion with data. While women now outpace men in education, a report released this week still shows that in America "women made on average 75% as much as their male counterparts in 2009" across educational levels. (Note that the study from which I excerpt observes data from Denmark, and quotes income disparity worldwide) · Mar 3 at 12:44pm
Diane, that data does not account for any of the important factors like employment type, marital status, experience, hours worked, etc. This point might be illuminating:
"...in 147 out of 150 of the biggest cities in the U.S., the median full-time salaries of young women are 8% higher than those of the guys in their peer group….this reverse gender gap, as it’s known, applies only to unmarried, childless women under 30 who live in cities."
Edited on Mar 3, 2011 at 1:00pmRe: Male CEOs With Daughters Place Higher Value on Female Employees
Mark Wilson
Diane Ellis, Ed.
Diane, that data does not account for any of the important factors like employment type, marital status, experience, hours worked, etc. This point might be illuminating:
"...in 147 out of 150 of the biggest cities in the U.S., the median full-time salaries of young women are 8% higher than those of the guys in their peer group….this reverse gender gap, as it’s known, applies only to unmarried, childless women under 30 who live in cities." · Mar 3 at 12:57pm
Edited on Mar 03 at 01:00 pm
I haven't had time to read this entire paper, but it for age, hours worked, and other factors. The data in the table below, while a bit dated, would seem to agree with the point you highlight in your comment about younger women having closed the gender wage gap. However, a rather large gap still exists for older female employees.
Jul '10
Re: Male CEOs With Daughters Place Higher Value on Female Employees
Diane Ellis, Ed.
Mark Wilson
Diane, that data does not account for any of the important factors like
Edited on Mar 03 at 01:00 pm
I haven't had time to read this entire paper, but it for age, hours worked, and other factors. The data in the table below, while a bit dated, would seem to agree with the point you highlight in your comment about younger women having closed the gender wage gap. However, a rather large gap still exists for older female employees. · Mar 3 at 1:45pm
Diane, that merely demonstrates that older women, who have spent considerable time away from their careers in order to raise children, have less experience than their male peers of comparable age.. Younger women haven't taken that time out...yet.
As a human resources guy, I'm not going to pay a 50-year-old woman with 10 years out of the workforce for child-rearing the same as a 50-year-old male who has an uninterrupted resume. Why should I?
Edited on Mar 3, 2011 at 1:56pmJul '10
Re: Male CEOs With Daughters Place Higher Value on Female Employees
Diane, as you know, I am a human resources guy. You have a fine education and a good set of skills. If you and a male with the same set of knowledge, skills and abilities come to me, I'm going to offer you the same wage.
But let's say 20 years go by and you've taken time 5 or 10 years away from the workplace to raise a family, while that guy hasn't, because his wife took the time away. He now has more knowledge than you do. And, in a technology-rich work environment, he has better, more current skills than you do.
Why shouldn't he command a richer market price than you do? I can't judge your comparative abilities until you've actually been under my roof for a couple of years. But even then, since I would have hired you at a lower rate due to your lower level of knowledge and skills, you cannot expect me to bump you up to his rate unless you affirmatively demonstrate that you bring comparable value to my organization. And that, Diane, is a difficult thing for you to prove.
Re: Male CEOs With Daughters Place Higher Value on Female Employees
Kenneth
Diane, that merely demonstrates that older women, who have spent considerable time away from their careers in order to raise children, have less experience than their male peers of comparable age.. Younger women haven't taken that time out...yet.
As a human resources guy, I'm not going to pay a 50-year-old woman with 10 years out of the workforce for child-rearing the same as a 50-year-old male who has an uninterrupted resume. Why should I? · Mar 3 at 1:55pm
Edited on Mar 03 at 01:56 pm
Sounds reasonable enough. But if I'm that 50-year-old woman, I might try my luck working for the CEO who has a daughter in hopes that he'd pay me more than you (who has no daughters) would. ;-)
Jul '10
Re: Male CEOs With Daughters Place Higher Value on Female Employees
Diane Ellis, Ed.
Kenneth
Diane, that merely demonstrates that older women, who have spent considerable time away from their careers in order to raise children, have less experience than their male peers of comparable age.. Younger women haven't taken that time out...yet.
As a human resources guy, I'm not going to pay a 50-year-old woman with 10 years out of the workforce for child-rearing the same as a 50-year-old male who has an uninterrupted resume. Why should I? · Mar 3 at 1:55pm
Edited on Mar 03 at 01:56 pm
Sounds reasonable enough. But if I'm that 50-year-old woman, I might try my luck working for the CEO who has a daughter in hopes that he'd pay me more than you (who has no daughters) would. ;-) · Mar 3 at 2:11pm
Trust me - as a 50-year-old woman, your best bet is big business. They understand the rules about gender and age discrimination.
Re: Male CEOs With Daughters Place Higher Value on Female Employees
Diane,
I don't have access to data here, and have not read that study, but my instinct is with Kenneth. My impression is that when you account for all factors -- experience, age, specialty, hours worked -- the gap favors women. For example, some studies talk about the gap between male and female professors. But if more women are in the liberal arts and more men are in engineering, it's going to show a skew.
The Independent Women's Forum might be a good source. I think some of their members have written about these issues. You've prodded me to do some investigating.
Nov '10
Re: Male CEOs With Daughters Place Higher Value on Female Employees
Diane Ellis, Ed.
TeeJaw
There is a gender salary gap, but it favors women so they have no need to avoid it. They’ve won it. · Mar 3 at 12:18pm
I think you'd have a tough time backing up this assertion with data. While women now outpace men in education, a report released this week still shows that in America "women made on average 75% as much as their male counterparts in 2009" across educational levels. (Note that the study from which I excerpt observes data from Denmark, and quotes income disparity worldwide) · Mar 3 at 12:44pm
Those studies are worthless because they compare the earnings of men who work full time with women who work half time and take leaves of absence to care for children. Affirmative action has benefited women over men, and surprisingly, over minorities as well.
There is simply no gender salary gap that favors men, if there is one it favors women, and you should know that. You’re completely off base here.
Re: Male CEOs With Daughters Place Higher Value on Female Employees
Kenneth: But let's say 20 years go by and you've taken time 5 or 10 years away from the workplace to raise a family, while that guy hasn't, because his wife took the time away. He now has more knowledge than you do. And, in a technology-rich work environment, he has better, more current skills than you do.
Why shouldn't he command a richer market price than you do?
Yes, this effect is certainly a large part of the explanation for the overall phenomenon. There are other pieces of the puzzle too. In Gary Becker's 1957 & 1971 textbook, "The Economics of Discrimination," he explains that much of the wage disparity also has to do with the discriminatory tastes of employers, co-workers, and customers. I'd imagine that these discriminatory tastes have probably evolved since Becker published his last edition, but that may well be part of the story. Hard to document since no one would in their right mind admit to such discrimination.
Re: Male CEOs With Daughters Place Higher Value on Female Employees
Here's an interesting link that takes the opposite view, courtesy of Hudson Insitute and IWF: http://iwf.org/inkwell/show/24426.html
Jul '10
Re: Male CEOs With Daughters Place Higher Value on Female Employees
You have to understand how compensation works.
If you're a 40-year old woman with a few years out of the workforce for child-rearing, I might pay you around the mid-point of your job range, while a 40-year-old male with no interruption in his career will command pay closer to the top of the range.
Then, each year, your department has a labor budget, that may amount to, say, a 3% increase. Unless you can demonstrate that you've added exceptional value to the organization, you're going to get 3% - and so will your male counterpart. There is no way you catch up, unless you are a stellar performer.
We're in the business of business. Not in the business of social equity.
The only "remedy" would be for government to intrude itself and determine, on whatever specious basis, the "true" worth of each employee.
Hardly something to be wished for.
Edited on Mar 3, 2011 at 2:25pm