At UBC Sauder, innovative ideas are hatched every day. Our professors challenge students to think differently and to make change in the world of business and beyond.

Professor Maurice Levi looks at the world of finance through a different lens. From delving into how testosterone plays a role in mergers and acquisitions to the effects of weather and daylight saving time on the way people trade stock, Levi looks for innovative answers to why markets can go wrong.

He discovered that a person’s date of birth might be the key impediment blocking them from scaling the corporate ladder.

Levi“Our findings indicated that those born in summer underperform in the ranks of CEOs as a result of the ‘birthdate effect,’ a phenomena resulting from the way children are grouped by age in school,” Levi says.

“Older children in a grade tend to do better than those at the tail end, who are less intellectually and physically developed,” he says. “Early success in school is often rewarded with leadership roles and enriched learning opportunities, leading to advantages that are magnified throughout life.”

In the United States, cut-off dates for school admission fall between September and January. The researchers determined that those CEOs in the sample born between June and July were the youngest in their class during school and those in March and April were the oldest. This takes into account children born in months close to the cut offs who were held back or accelerated.

Levi and his co-authors, former UBC Sauder PhD students Qianqian Du and Huasheng Gao, investigated the relative-age effect in a sample of 375 CEOs from S&P 500 companies between 1992 and 2009.

They found that only 6.13 percent of the CEOs were born in June compared to the overall U.S. birthrate for the month of 8.16 percent. Only 5.87 percent of the CEOs were born in July compared to the birth rate of 8.75 percent.

By contrast, people born in March and April, those determined to be the oldest within their grades, represented 12.53 percent and 10.67 percent of the sample of CEOs.

“Our study adds to the growing evidence that the way our education system groups students by age impacts their lifelong success,” says Levi. “We could be excluding some of the business world’s best talent simply by enrolling them in school too early, while arbitrarily setting others up for success.”

Levi specializes in international finance, international trade and the macroeconomics of interest rates, and has published extensive research including analyzing the benefits of a cash-free economy and finding that women directors get better deals in mergers and acquisitions. He has taught in the MBA, IMBA, MM and BCom programs at UBC Sauder.

Challenging Ideas