Fathers are ‘overvalued’ while mothers are paid less, new study reveals

Men who become fathers benefit from ‘overvaluation’ in their professional lives whereas mothers experience the opposite, often undervalued by employers and underpaid as a result, according to new research.

The study, conducted by Khadija van der Straaten, at the Rotterdam School of Management Erasmus University (RSM) analysed the disparities in pay and progression for men and women working at multinational enterprises (MNEs) and domestic firms around the world both before and after they became parents.

By comparing the wages of more than 36,000 fathers, mothers, and employees without children across 57 countries (using data taken from the WageIndicator surveys), Dr van der Straaten found that men benefited financially from parenthood, whilst women were penalised.

Furthermore, despite having a global vision the study found MNEs to be amongst the worst offenders, with the fatherhood bonus being higher in

MNE subsidiaries than in domestic firms.

“Fathers received a wage premium compared to their childless male peers, across both MNE subsidiaries and in domestic firms” says Professor van der Straaten.

“But this premium was US$2 per hour in multinationals, and US$1 per hour, in domestic firms.”

Mothers, on the other hand, suffered regardless of where they worked.

The study revealed a wage penalty for mothers across the board, however the effect was comparable across multinational subsidiaries and local firms.

Dr van der Straaten said the disparity is a result of how gender identity is construed within organisations, as well as that women still hold 9 per cent of senior level positions within the world’s largest MNEs.

Dr van der Straaten said: “While MNEs are widely recognised for providing employment to a significant number of women, work-life balance can be exceptionally challenging in such organisations because of travel, working across time zones and a typically competitive, masculine corporate culture.

“The reality of being a working parent is very different for mothers compared to fathers.”

Geography and culture may also come into play, with the study highlighting that the MNE’s home country might also play a role in gendered perspectives for subsidiary firms.

The results challenge commonly held assumptions about the causes and cures of gender pay inequity related to women’s characteristics and life patterns.

“Previous research suggests the wage gap could be due to reduced productivity at work as a result of a more demanding home life, whilst fathers are characterised as more committed, reliable and deserving than other male colleagues,” says Dr van der Straaten.

“However, the absence of a larger penalty for mothers in MNEs compared to local firms proves that motherhood itself is not the only reason for gender inequality in the workplace.”

Because of this, existing policies designed to help redress the balance between male and female workers such as offering flexibilities in working hours, whilst useful for many, do not fully address the core issue of gender parity.

Dr van der Straaten said: “Policies targeted at women may not lessen the positive biases towards men and masculine corporate cultures.

“A critical evaluation of gender-related policies, especially in multinationals seems necessary.

“Businesses could start by setting up their organisation for more gender equality by thinking who has the advantages, not just focusing on who is disadvantaged. We are not only paying women too little; we are also paying men too much.”