Policies that preserve productive employment relationships are particularly important in recessions. The collapse of economic activity during the pandemic was unlike any modern recession. We document the result of a national policy response including publicly subsidized furloughs that allowed workers to keep their jobs through the recession. The policy allowed for low unemployment and for the labor market to stabilize relatively quickly. Such policies are expensive with hard-to-measure benefits. Using novel survey and administrative data from Denmark, we find the policy was effective at a net cost of US$15 and US$127 per furloughed day for part- and full-time workers respectively.
Personnel Management and School Productivity: evidence from India (submitted)
with R. Lemos and K. Muralidharan
This paper uses new data to study school management and productivity in India. We report four main results. First, management quality in public schools is low, and ~2σ below high-income countries with comparable data. Second, private schools have higher management quality, driven by much stronger people management. Third, people management quality is correlated with both independent measures of teaching practice, as well as school productivity measured by student value added. Fourth, private school teacher pay is positively correlated with teacher effectiveness, and better-managed private schools are more likely to retain more effective teachers. Neither pattern is seen in public schools.
This paper analyses the effect of a firm’s organizational capacity on reported profitability of multinational enterprises (MNEs). Better organizational practices improve productivity and, in principle, increase potential taxable profits of firms. However, higher adoption of these practices may also enable more efficient allocation of profits across tax jurisdictions. We present new evidence that MNE subsidiaries with better practices, located in high-tax countries report significantly lower profits and have higher incidence of bunching around zero returns on assets. This is in contrast with the positive relationship with firm performance in these subsidiaries. We show these results are driven by patterns consistent with profit shifting behavior. Using an event study design, we find that firms with better practices are more responsive to corporate tax rate changes. Our results suggest organizational capacity, especially monitoring-related practices, enable firms to engage in shifting profits away from their high-tax subsidiaries.
The ties that bind: implicit contracts and the adoption of management technology in the firm
with R. Lemos
Covered on: World Bank’s Development Impact blog, The Economist, LSE Business Review, VoxDev
Awarded Accessit Best Paper at IOEA 2018.
[project website] [CEPR Discussion Paper]
We investigate how implicit contracts between firm managers and employees are linked to the adoption of productivity-enhancing organizational practices. We collect new data on ownership successions and show the first causal evidence that maintaining family control leads to lower adoption of managerial best practices. We use gender composition of the outgoing CEO’s children as identifying variation at the succession point. We explore firm “reputation costs” as a novel mechanism constraining investment in management, and build a new proxy using data on eponymy — firms named after the family name. We find suggestive evidence that implicit contracts matter for management adoption.
Why do some students learn more in some schools than others? One consideration receiving growing attention is school management. To study this, researchers need to be able to measure school management accurately and cheaply at scale, and also explain any observed relationship between school management and student learning. This paper introduces a new approach to measurement using existing public data, and applies it to build a management index covering 15,000 schools across 65 countries, and another index covering nearly all public schools in Brazil. Both indices show a strong, positive relationship between school management and student learning. The paper then develops a simple model that formalizes the intuition that strong management practices might be driving learning gains via incentive and selection effects among teachers, students and parents. The paper shows that the predictions of this model hold in public data for Latin America, and draws out implications for policy.
This paper explores the extent to which firm-based factors affect workers’ mental health. We use a novel dataset on prescription anti-depressant and anxiety drugs for the population of workers in Denmark over 13 years, and link it to the employer-employee dataset tracking 2.6 million workers across over 35,000 firms over time. We use an event study design to estimate the degree of convergence in drug use after a move into a new firm. After three years, the usage of movers converges to the usage in the destination firm by as much as 20%.
SELECTED WORK IN PROGRESS
Golden skirts or dark horses: female CEOs in India
with Namrata Kala
School management and principal training: evidence from Puerto Rico
with Gustavo Bobonis and Marco Gonzales-Navarro
Entrepreneurial Manufacturers in Emerging Economies
with Angela Aristidou and Sarah Wolfolds
Natural Laws of Management
with Scott Ohlmacher and “world MOPS” leaders
Financial Management and School Performance: evidence from Mozambique
with Sandra Sequeira and Guo Xu
I have a research program with Ian Schmutte on exploring management and personnel questions with the Brazilian WMS and RAIS data. Reach out if you are interested in these topics.