Working Paper: NBER ID: w25852
Authors: Achyuta Adhvaryu; Anant Nyshadham; Jorge A. Tamayo
Abstract: Which managerial skills, traits, and practices matter most for productivity? How does the observability of these features affect how appropriately they are priced into wages? Combining two years of daily, line-level production data from a large Indian garment firm with rich survey data on line managers, we find that several key dimensions of managerial quality, like attention, autonomy, and control, are important for learning-by-doing as well as for overall productivity, but are not commensurately rewarded in pay. Counterfactual simulations of our structural model show large gains from screening potential hires via psychometric measurement and training to improve managerial practices.
Keywords: managerial quality; productivity; psychometric measurement; management practices
JEL Codes: D24; L2; M11; M12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| managerial quality (L15) | productivity (O49) |
| managerial traits (M54) | productivity (O49) |
| managerial attention (M54) | productivity (O49) |
| managerial autonomy (M54) | productivity (O49) |
| managerial control (M54) | productivity (O49) |
| experience (Y60) | productivity (O49) |
| psychometric measurements (C52) | productivity (O49) |
| managerial practices (M54) | productivity (O49) |
| current hiring practices (M51) | inefficiencies in labor allocation (J29) |
| current hiring practices (M51) | compensation disconnect (J33) |