Do workers, managers, and stations matter for effective policing? A decomposition of productivity into three dimensions of unobserved heterogeneity

Amit Chaudhary
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Amit Chaudhary: University of Warwick

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: Misallocation of resources in an economy makes firms less productive. I document the roles of heterogeneity, sorting, and complementarity in a framework where workers, managers, and firms interact to shape productivity. The approach I follow uses the movement of workers and managers across firms to identify the distribution of productivity. I webscraped novel microdata of crime reports from the Indian police department and combined them with the worker-level measurement of productivity. Using this data I show that the third source of heterogeneity in the form of manager ability is an important driver of differences in firm productivity. I empirically identify complementarities between workers, managers, and firms using my estimation methodology. Counterfactual results show that reallocating workers by applying a positive assortative sorting rule can increase police department productivity by 10%.

Date: 2021
New Economics Papers: this item is included in nep-bec, nep-cse, nep-eff, nep-hrm, nep-tid and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1377

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