Frontline Leadership: Evidence from American Civil War Captains

This paper presents new evidence on the critical role of lower-level organizational leaders. Unlike top managers, frontline leaders are essential for implementing organizational strategies by maintaining team cohesion when shirking is profitable for workers. We study this in the context of the Union Army during the U.S. Civil War, using data on 2.2 million soldiers and tracking captains and their 100-soldier companies at weekly frequency throughout the conflict. We estimate leader fixed effects during non-combat weeks to measure leadership quality in a leader value-added framework. We validate this measure by showing that captains were not assigned based on prior unit performance or observable pre-war characteristics. High-quality leaders earned more after the war, but not before, and were more frequently recognized as good leaders in their postwar biographies. Daily event-study estimates around major battles show that better captains significantly reduced desertions in combat. Exploiting quasi-random leader turnover, we find evidence that this effect is causal. Using digitized battle maps, we rule out risk aversion as a mechanism and find instead that better leaders had higher mortality rates, consistent with a leading-by-example explanation. We also document modest learning-by-doing effects. These findings highlight the often-overlooked importance of frontline leadership, where direct supervision and interpersonal influence are strongest.