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.
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 mens 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 womens 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 firms 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, womens wages rose relative to mens, 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.
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 womens wages.
