Fathers as leaders

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Fathers as leaders

How CEOs' children affect employee wages

by Christin L. Munsch on Tuesday, January 29, 2013 - 9:01am

Image of Obama and family at inaugurationWith last week's presidential inauguration, the eyes of the world focused not only on President Barack Obama but also on the entire First Family. According to Obama, his daughters Malia and Sasha have profoundly affected him as a leader. In an open letter to Malia and Sasha, published in “Parade Magazine" in 2009, Obama recalled that, as a young man, he thought his life was all about himself and how he would make his way in the world. But after the birth of his daughters, he said his “big plans” didn’t seem so important anymore.

“I realized that my own life wouldn't count for much unless I was able to ensure that you had every opportunity for happiness and fulfillment in yours,” he wrote. “In the end, girls, that's why I ran for President: because of what I want for you and for every child in this nation.”

It’s no surprise that parents hold sway over their children or that children exert influence over their parents. It is surprising, however, that the birth of a child can affect the lives of hundreds—if not thousands—of people.

“In the end, girls, that's why I ran for President: because of what I want for you and for every child in this nation,” Obama wrote. 

A new “Administrative Science Quarterly” article by Michael Dahl, Cristian Dezső and David Ross examines how fatherhood affects a different kind of leader. Specifically, the article considers the consequences of a male chief executive offer (CEO) having children on employee wages.

The authors find that the transition to fatherhood has a profound effect on whether or not CEOs hoard or distribute company resources, although their findings are not entirely intuitive. The sex of the child, the gender of the employee, and whether or not the child is the CEO’s first-born influence CEO values and, by extension, employee wages. 

Do daughters make CEO dads nicer?

Dahl and his colleagues made use of data from 1996 to 2006 compiled by Statistics Denmark, a governmental agency that collects detailed data on all individuals and firms in Denmark. This data is used to provide impartial information to the public and to aid legislative decisions, but it is also widely used by social science researchers. In general, the more children a CEO has, the less he pays his employees—although the actual decrease in wages is quite small. 

image of dad and girl“Despite increasing participation by women in the labor force and changing cultural attitudes, there remains a normative imperative, even a taken-for-granted assumption, that a man should support his family,” the authors write.  Thus, they explain, in reaction to a child’s birth, male CEOs conserve the firm’s resources for themselves and their growing families.

The authors paint a very different picture of fatherhood, however, when they take into consideration the child’s gender and birth order. First-born daughters actually positively affect CEOs’ benevolence toward their employees. Having a first-born daughter is associated with an increase in wages for both men and women.

The authors explain that women tend to consider the well-being of others more than men when they make decisions. Moreover, men parenting daughters tend to acquire these values as they socialize their daughters to be generous and other-directed. As a result, the birth of a daughter may make men nicer. Other researchers have made similar arguments. For example, in 2010 Oswald and Powdt found that daughters made people more likely to vote for left-wing parties. And, in 2008, Yale University economist Ebonya Washington found that U.S. legislators with daughters tended to vote more liberally. In other words, the birth of a daughter seems to promote more collectivist and equitable beliefs.

Parenting, especially parenting daughters, increases feminist sympathies

Interestingly, the birth of a first-born daughter increases women’s wages more than men’s wages. Women’s wages increased by about 1.1 percent, or $458, whereas men’s wages only increased by about 0.6 percent, or $250. The birth of a first-born son also increases women’s wages—by 0.8 percent or $333—although it decreases men’s wages by 0.5 percent, or $208.

Why? The authors contend that the birth of a child affects the way a CEO perceives his wife “and, by extension, women in general.” The transition into parenthood is associated with an increase in husbands’ love for their wives, according to the authors. Moreover, the authors assert that, “in the aftermath of childbirth, mothers frequently assert authority over the welfare and socialization of the child, thereby demonstrating leadership and competence.” The authors maintain that this demonstration of competence may transfer to the father’s perceptions of other women and contradict any preconceived doubts the CEO had about women’s competence more generally.

The birth of a daughter may advantage women employees more than the birth of a son because having daughters increases the salience of feminist issues like the gender gap in wages.

Moreover, the authors explain that the birth of a daughter may advantage women employees more than the birth of a son because having daughters increases the salience of feminist issues like the gender gap in wages. According to the Organization for Economic Cooperation and Development, a typical American woman employed full-time earns approximately 19 percent less than a comparable American man. Danish women fare somewhat better, but women’s earnings still lag behind men’s by approximately 11 percent. 

Given widespread economic inequality, might Dahl and his colleagues have stumbled upon an avenue for reducing the gender gap in wages and reinvigorating the stalled revolution? Their findings certainly suggest that men with daughters empathize more with women.

Washington, the Yale economist, found something similar. In an article in the American Economic Review, she writes that the effect of having daughters on the propensity of male congressmen to vote liberally was particularly strong on matters related to women’s rights. Anecdotally, when speaking about women’s issues, President Barack Obama has referenced his daughters on more than one occasion. For example, this past May while campaigning in Denver, Colorado, Obama said, “We certainly don’t need another political fight about ending a woman’s right to choose, or get rid of Planned Parenthood, or taking away affordable birth control. I want women to control their own health choices, just like I want my daughters to have the same opportunities as your sons.”  In short, the research of Washington and Dahl both suggest that parenting daughters might play a part in advancing gender equality.

Dahl and his colleagues call for more research on how children shape their parents’ values and how the CEO values influence corporate policies. For example, at this point, it is unclear how the birth of children affects other human resources activities like the hiring, promotion, and termination of women.

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Facts:

  • The birth of a first-born daughter increases women’s wages more than men’s wages. Women’s wages increased by about 1.1 percent, or $458, whereas men’s wages only increased by about 0.6 percent, or $250
  • The birth of a first-born son also increases women’s wages —.8 percent or $333 — although it decreases men’s wages by .5 percent, $208
  • A typical American woman employed full-time earns approximately 19 percent less than a comparable American man, according to the Organization for Economic Cooperation and Development. Danish women fare somewhat better, but women’s earnings still lag behind men’s by approximately 11 percent
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image of Michael DahlMichael S. Dahl is a Professor of the Economics of Entrepreneurship and Organizations at the Department of Business and Management, Aalborg University, Denmark. He has a PhD and a MSc in Industrial Economics both from Aalborg University. Previously, he held visiting scholarships at Carnegie Mellon University, SCANCOR at Stanford University, and Eindhoven Center for Innovation Studies.

 

 

image of DezsoCristian Dezsö is an Assistant Professor at the University of Maryland, Robert H. Smith School of Business. He completed his PhD at New York University’s Stern School of Business. He also holds an MA in economics from the Central European University in Budapest, Hungary, and a BA in business from the "Babes-Bolyai" University in Cluj, Romania. He teaches the global economic environment and the business and government courses in the part-time MBA and undergraduate programs. His research appears in the "Journal of Economics" and "Management Strategy."

image of David RossDavid Ross is an Associate Professor at Columbia Business School. He holds a PhD in Economics from New York University's Stern School of Business and an MBA from the University of Pennsylvania's Wharton School of Business. Previously, he was an associate and vice president with Citigroup Investment Banking in New York and Seoul, Korea and an analyst with National Westminster Bank in New York and London. His research focuses on people and performance, that is, how to recruit, motivate, and organize employees for competitive success.

 

Image of Christin MunschChristin L. Munsch is a postdoctoral fellow at the Clayman Institute for Gender Research. She is a sociologist and a member of the Clayman Institute’s working group on Redesigning and Redefining Work.