Men who become fathers benefit from “overvaluation” in their professional lives, research shows

The research into the differences in wages of working fathers and mothers in MNCs found that "we are not only paying women too little; we are also paying men too much".

A study conducted by Assistant Professor 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.

It found that men who become fathers benefit from "overvaluation" in their professional lives whereas mothers experience the opposite, i.e. they are often undervalued by employers and underpaid, as a result.

Further, MNEs were found to be amongst the worse offenders, with the "fatherhood bonus" being higher in MNE subsidiaries than in domestic firms.

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 benefitted financially from parenthood, whilst women were penalised.

She explained: "Fathers received a wage premium compared to their childless male peers, across both MNE subsidiaries and in domestic firms. 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, i.e. there was a wage penalty for mothers across the board, however the effect was comparable across multinational subsidiaries and local firms.

Dr van der Straaten puts the disparity down to a result of how gender identity is construed within organisations.

She 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."

She noted that geography and culture may also come into play, as the MNE’s home country might play a role in gendered perspectives for subsidiary firms.

Comparing the results with work done previously in this space, Dr van der Straaten said it was previously suggested that 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.

However, she noted, 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.

She suggested: "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."

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