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CEP discussion paper
The Value of Bosses
Edward P. Lazear, Kathryn L. Shaw and Christopher T. Stanton
December 2014
Paper No' CEPDP1318:
Full Paper (pdf)

JEL Classification: M50; C13; C23; D20; L23

Tags: bosses; supervisors; productivity

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.