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December 2022 Seminar


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The Missing Middle Managers: Labor Costs, Firm Structure, and Development



Jonas Hjort (University College London) , Hannes Malmberg (University of Minnesota) and  Todd Schoellman (Federal Reserve Bank of Minneapolis)



Hannes Malmberg


Wednesday, December 7, 2022

10:00 – 11:00 AM (EST)


HYBRID SEMINAR: Webex and Room F-3K-E-400




Link to Paper

This paper shows that large, multi-establishment business enterprises face a high cost of middle management in poor countries and that this cost inhibits the growth of the modern sector. We provide new empirical evidence using a database covering compensation for 300,000 middle managers working at modern firms in 146 countries. We estimate that the elasticity of real management costs with respect to real GDP per worker is 0.1. We quantify the importance of this finding using a calibrated appropriate technology model where firms choose whether to adopt the management-intensive modern business structure. Lower management costs in developing countries would increase the revenue share of the modern sector by 10-20 percentage points.


Connection Details


Meeting number (access code): 2305 412 4681

Meeting password: D7MmmQ3DNv9

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