TY  - JOUR
AU  - Feyrer,James
TI  - The US Productivity Slowdown, the Baby Boom, and Management Quality
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15474
PY  - 2009
Y2  - November 2009
UR  - http://www.nber.org/papers/w15474
L1  - http://www.nber.org/papers/w15474.pdf
N1  - Author contact info:
James Feyrer
Department of Economics
Dartmouth College
6106 Rockefeller Hall
Hanover, NH 03755-3514
Tel: 603/646-2533
Fax: 603/646-2122
E-Mail: james.feyrer@dartmouth.edu
AB  - This paper examines whether management changes caused by the entry of the baby boom into the workforce explain the US productivity slowdown in the 1970s and resurgence in the 1990s. Lucas (1978) suggests that the quality of managers plays a significant role in determining output.  If there is heterogeneity across workers and management skill improves with experience, an influx of young workers will lower the overall quality of management and lower total factor productivity.  Census data shows that the entry of the baby boom resulted in more managers being hired from the smaller, pre baby boom cohorts.  These marginal managers were necessarily of lower quality.  As the boomers aged and gained experience, this effect was reversed, increasing managerial quality and raising total factor productivity.  Using the Lucas model as a framework, a calibrated model of managers, workers, and firms suggests that the management effects of the baby boom may explain roughly 20 percent of the observed productivity slowdown and resurgence.
ER  -