NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Value of Bosses

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

NBER Working Paper No. 18317
Issued in August 2012
NBER Program(s):   LS

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.

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This paper was revised on June 20, 2013

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Document Object Identifier (DOI): 10.3386/w18317

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