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Managers and Productivity in the Public Sector

Alessandra Fenizia

Econometrica · 2022 · Volume 90 · Issue 3

DOI: 10.3982/ECTA19244

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%.

Keywords

Productivity, managers, public sector

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