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Leadership: A Personnel Economics Approach

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  • Edward P. Lazear

Abstract

A theory of leadership is proposed and tested. Leaders are characterized as those who have the ability to choose the right direction more frequently than their peers. The theory implies that leaders tend to be more able, place themselves in visible decision making situations more frequently, and are generalists. Also, the most able leaders should be found in the highest variance industries, where decision making has the greatest payoff. The theory is tested using data on Stanford business school alumni and is confirmed. Leaders are generalists rather than specialists, both innately and in their pattern of skill acquisition.

Suggested Citation

  • Edward P. Lazear, 2010. "Leadership: A Personnel Economics Approach," NBER Working Papers 15918, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:15918
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    References listed on IDEAS

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    1. Steffen Huck & Pedro Rey-Biel, 2006. "Endogenous Leadership in Teams," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 162(2), pages 253-261, June.
    2. Fredrik Andersson & Matthew Freedman & John Haltiwanger & Julia Lane & Kathryn Shaw, 2009. "Reaching for the Stars: Who Pays for Talent in Innovative Industries?," Economic Journal, Royal Economic Society, vol. 119(538), pages 308-332, June.
    3. Baumol, William J., 1996. "Entrepreneurship: Productive, unproductive, and destructive," Journal of Business Venturing, Elsevier, vol. 11(1), pages 3-22, January.
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    Cited by:

    1. Kvaløy, Ola & Schöttner, Anja, 2015. "Incentives to motivate," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 26-42.
    2. Giovanna d’Adda, 2012. "Leadership and influence: Evidence from an artefactual field experiment on local public good provision," ECON - Working Papers 059, Department of Economics - University of Zurich.
    3. Kim, Jaesoo, 2012. "Endogenous leadership in incentive contracts," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 256-266.
    4. Dora L. Costa, 2014. "Leaders: Privilege, Sacrifice, Opportunity, and Personnel Economics in the American Civil War," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 30(3), pages 437-462.
    5. Atolia Manoj & Kurokawa Yoshinori, 2021. "Entry Costs, Task Variety, and Skill Flexibility: A Simple Theory of (Top) Income Skewness," The B.E. Journal of Macroeconomics, De Gruyter, vol. 21(1), pages 97-124, January.
    6. Constant, Amelie F. & Tien, Bienvenue N., 2010. "African Leaders: Their Education Abroad and FDI Flows," IZA Discussion Papers 5353, Institute of Labor Economics (IZA).
    7. Ljungqvist, Alexander & Raff, Konrad, 2017. "Busy Directors: Strategic Interaction and Monitoring Synergies," CEPR Discussion Papers 12361, C.E.P.R. Discussion Papers.

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    JEL classification:

    • J0 - Labor and Demographic Economics - - General

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