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CEP discussion paper

The Value of Bosses

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.

Edward P. Lazear, Kathryn L. Shaw and Christopher T. Stanton

10 December 2014     Paper Number CEPDP1318

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This CEP discussion paper is published under the centre's Growth programme.