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Managers and Productivity in the Public Sector

Alessandra Fenizia

Econometrica, 2022, vol. 90, issue 3, 1063-1084

Abstract: This paper studies the impacts of managers in the administrative public sector using novel Italian administrative data containing an output‐based measure of productivity. Exploiting the rotation of managers across sites, I find that a one standard deviation increase in managerial talent raises office productivity by 10%. These gains are driven primarily by the exit of older workers who retire when more productive managers take over. I use these estimates to evaluate the optimal allocation of managers to offices. I find that assigning better managers to the largest and most productive offices would increase output by at least 6.9%.

Date: 2022
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https://doi.org/10.3982/ECTA19244

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