Work

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

Year: 2026

Type: article

Abstract: Why do managers matter for firm performance? This article provides evidence of the critical role of managers in matching workers to jobs within the firm using the universe of personnel records from a large multinational firm. The data cover 200,000 white-collar workers and 30,000 managers over 11 years in 100 countries. I identify good managers by their speed of promotion and leverage exogenous variation induced by the rotation of managers across teams. I find that good managers cause workers to reallocate within the firm through lateral and vertical transfers and generate large and persistent gains in workers’ career progression and productivity. 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 the managers’ time at the firm.

Source: The Quarterly Journal of Economics

DOI: 10.1093/qje/qjag017

Author: Virginia Minni

Institution: University of Chicago

Language: English

Topic: Labor market dynamics and wage inequality

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $7,619