Making the Invisible Hand Visible: Managers and the Allocation of Workers to Jobs

Winner, Best Job Market Paper Award 2022, European Economic Association and UniCredit Foundation 

How do workers match with jobs inside firms? This paper provides evidence on the role of managers as matchmakers using administrative data from a large multinational firm. The data covers 200,000 white-collar employees and 30,000 managers over 10 years in 100 countries. Leveraging exogenous variation induced by the rotation of managers across teams, I find that good managers, as revealed by their own speed of promotion, cause workers to reallocate within the firm through lateral and vertical transfers. This leads to significant gains in workers' long-run career progression: a gap of 30% in annual pay persists for at least seven years after the manager transition. Workers also perform better on objective performance measures. In the aggregate, I estimate that the elasticity of output per worker to past exposure to good managers at the establishment level is 2.03. My results imply that the visible hands of managers match workers' specific skills to specialized jobs, leading to an improvement in the productivity of existing workers that outlasts their time at the firm.

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Working papers

Gender Roles and the Misallocation of Labor Across Countries (with Nava Ashraf, Oriana Bandiera and Victor Quintas-Martinez), May 2022
This paper asks whether the gendered division of work inside and outside the home leads to the misallocation of labor. Using personnel data of a multinational firm covering 100K employees in 101 countries over 5 years together with labor force participation data we show that women are more positively selected than men: the productivity of the average female worker is higher than that of the average male worker, and this gap is decreasing in women’s participation in the labor force. Structural estimates indicate that equalizing barriers to labor force participation would increase firm productivity by 32% keeping employment and the wage bill constant.

Union Leaders: Experimental Evidence from Myanmar (with Laura Boudreau, Rocco Macchiavello and Mari Tanaka), April 2022
Economic theory suggests that leaders may play a key role in enabling social movements to overcome collective action problems through a variety of distinct mechanisms. Empirical tests of these theories outside the lab are scarce due to both measurement and identification challenges. We conduct multiple field experiments to test theories of leadership in the context of Myanmar’s burgeoning labor union movement. We collaborate with a confederation of labor unions as it mobilizes garment workers in the run-up to a national minimum wage negotiation. We present three sets of results. First, we document that union leaders differ from union members and non-members along several traits that psychologists and organizational sociologists have associated with ability to influence collective outcomes. Second, we randomly embed leaders in group discussions on workers’ preferred and expected minimum wage levels. A leader's presence in the group improves group engagement and increases workers’ consensus around the unions’ preferred minimum wage levels. Third, we conduct a mobilization experiment in which workers are invited to participate in an unannounced activity that features strategic complementarity in turnout. Leaders influence participation through both coordination and social pressure mechanisms rather than by simply motivating workers.

Placement Officer
Mark Schankerman

Supervisors/Advisors
Oriana Bandiera
John Van Reenen
Nava Ashraf
Robin Burgess

References
Oriana Bandiera
John Van Reenen
Nava Ashraf
Robin Burgess

Email
v.m.minni@lse.ac.uk

Office Address
Department of Economics
London School of Economics and Political Science
Houghton Street, London WC2A 2AE