Born in summer? Odds are you're not a CEO

Maurice Levi

Sauder 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 is looking for innovative answers to why markets can go wrong.

His newest research finds that a person’s date of birth might be the key impediment blocking them from scaling the corporate ladder.

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

“Older children in a grade tend to do better than those at the tail end, who are less intellectually and physically developed,” explains Prof Levi. “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.

Professor Levi and his co-authors, former 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.”