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The Value of Bosses

44 Pages Posted: 18 Aug 2012 Last revised: 14 Jun 2014

Edward P. Lazear

Stanford Graduate School of Business; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Kathryn L. Shaw

Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

Christopher Stanton

National Bureau of Economic Research (NBER); London School of Economics & Political Science (LSE); University of Utah - Department of Finance

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Date Written: June 13, 2014

Abstract

How and by how much do supervisors enhance worker productivity? Using a company-based data set on the productivity of technology-based services workers, supervisor effects are estimated and found to be large. Replacing a boss who is in the lower 10% of boss quality with one who is in the upper 10% of boss quality increases a team’s total output by more than would adding one worker to a nine member team. Workers assigned to better bosses are less likely to leave the firm. A separate normalization implies that the average boss is about 1.75 times as productive as the average worker.

Suggested Citation

Lazear, Edward P. and Shaw, Kathryn L. and Stanton, Christopher, The Value of Bosses (June 13, 2014). Available at SSRN: https://ssrn.com/abstract=2131572 or http://dx.doi.org/10.2139/ssrn.2131572

Edward Lazear

Stanford Graduate School of Business ( email )

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National Bureau of Economic Research (NBER)

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IZA Institute of Labor Economics

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Kathryn Shaw

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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Christopher Stanton (Contact Author)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
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London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

University of Utah - Department of Finance ( email )

David Eccles School of Business
Salt Lake City, UT 84112
United States

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