M5 | Macro Paper Warehouse

Closing Gender Gaps Through Workplace Diversity: The Intergenerational Effects of World War I

Mon, 01 Jan 0001 00:00:00 +0000

This paper asks whether exposure to greater female representation in the workplace can persistently reduce intergenerational gender gaps in labor market outcomes. The authors exploit the sudden, city-by-department variation in female employment within the U.S. federal government triggered by World War I mobilization. Using the Official Registers of the United States — biennial personnel rosters covering the near-universe of federal employees from 1913 to 1921 — linked to full-count decennial censuses (1900–1940), they construct a granular measure of each office’s (city × department) change in female share between 1915 and 1919, then trace labor force outcomes for the children of incumbent civil servants in the 1940 Census.

WWI caused the female share of the federal civilian workforce to jump by 13 percentage points — a doubling within two years (1917–1919). These wartime female entrants were younger, more likely to be single, more educated, more geographically mobile, and less likely to have been previously employed than their male counterparts, suggesting the war mobilized a previously untapped labor pool. The increase was driven almost entirely by clerical positions: the female share of the federal clerical workforce rose from roughly 30% to nearly 70% within two years.

The main finding is that a one standard deviation (SD) increase in parental exposure to female co-workers reduces the gender gap in labor force participation (LFP) among children of incumbent civil servants by 4.1–4.6 percentage points in the within-city, within-department specification — a decline in the mean gender LFP gap of approximately 8.6–9.6% by 1940. This effect is entirely driven by a higher propensity of daughters to work; sons’ LFP is unaffected. The intergenerational effect operates primarily through exposed fathers, including fathers without working wives, identifying a channel beyond the mother-to-daughter vertical transmission emphasized in prior literature. Children who were teenagers at the time of parental exposure show the largest effects, consistent with formative-years malleability. A placebo test using civil servants who left the same offices before the wartime shock shows no comparable effect, ruling out time-invariant office-level selection.

Parental exposure extends beyond the public sector: the private sector LFP effect is comparable in magnitude to the public sector effect. The gender earnings gap among children of exposed civil servants narrows by 12%, driven by daughters moving into higher-paying, previously male-dominated positions rather than by differences in hours or weeks worked. Marriage, fertility, and schooling differences only partially mediate the LFP effect, with a residual exposure effect remaining after controlling for these proximate determinants.

At the aggregate level, a 1 SD increase in city-level exposure to female federal workers raises overall female LFP by 0.9–1.0 percentage points, with no effect on male LFP, and the effect persists through 1940. A back-of-envelope calculation implies each additional female wartime civil service entrant generated approximately 2.4 additional women entering the workforce — a multiplier effect. Neighborhood-level analysis shows LFP gains are concentrated in enumeration districts where wartime female civil servants resided, and cities with greater female federal employment exposure also saw faster women’s club membership growth after WWI.

The scope conditions are important: the sample covers 70 cities and 8 federal departments with meaningful pre-war staffing; children must have been born by 1917; and the 1940 outcomes reflect adulthood labor decisions in a labor market shaped by subsequent decades of change. The design relies on within-city and within-department residual variation in female share change being conditionally exogenous, supported by lack of correlation with pre-war office characteristics.

Q: What was the scale of the WWI shock to female federal employment? A: The U.S. entry into WWI in April 1917 triggered a near-doubling of total federal civilian employment from roughly 150,000 to over 300,000 workers by 1919. Within this expansion, the share of female civil servants increased by 13 percentage points — a doubling of the female share within two years. The increase was driven almost entirely by clerical positions, where the female share rose from around 30% to nearly 70%.

Q: How do the authors measure parental exposure to female co-workers? A: Exposure is measured as the change in the share of female civil servants at the city-by-department (“office”) level between 1915 and 1919. The sample is restricted to offices with at least 20 civil servants in 1915 and cities with at least two federal departments, yielding 70 cities and 8 departments. The interquartile range of exposure across offices is approximately 10 percentage points, and cross-city and cross-department variation explains 58% of the overall variation, leaving substantial residual office-level variation for identification.

Q: What is the main intergenerational finding and its magnitude? A: A 1 SD increase in parental exposure to female co-workers increases the relative likelihood that a daughter works (compared to a son) by 2 percentage points in the baseline specification, and by 4.1–4.6 percentage points in the preferred within-city and within-department specification. Since daughters of civil servants are on average 48 percentage points less likely than sons to be in the labor force in 1940, this corresponds to closing the mean gender LFP gap by approximately 8.6–9.6%.

Q: Does the effect operate through daughters or sons? A: The effect is entirely driven by daughters. Parental exposure to female co-workers has no statistically discernible impact on the labor force participation of sons. The decline in the gender LFP gap is thus attributable to a higher propensity of daughters of exposed civil servants to work.

Q: What is the key placebo test, and what does it show? A: The authors exploit high-frequency personnel records to identify civil servants who selected into the same offices that would later be exposed but who left before the wartime shock occurred. These pre-departure leavers show no intergenerational exposure effects on their children’s LFP, ruling out the interpretation that time-invariant selection into particular offices drives the results.

Q: Which parent serves as the primary channel of transmission? A: Exposed fathers are the primary conduit. The effect for daughters is precise and sizable even when restricting the sample to fathers without working wives, suggesting the channel does not depend on children observing maternal employment. While the estimated effect through mothers is positive, it is imprecise — likely due to the small sample of female incumbent civil servants. This identifies fathers as a new channel of vertical intergenerational norm transmission, beyond the mother-to-daughter pathway emphasized in prior literature.

Q: How does children’s age at the time of parental exposure moderate the effect? A: The exposure effects are concentrated among children who were teenagers at the time of parental exposure during WWI. Children who were older and more likely to have already left the household or formed fixed beliefs show little to no detectable effect. This pattern is consistent with the formative-years hypothesis that experiences during adolescence shape lifetime economic behavior.

Q: Does the intergenerational effect extend beyond the public sector? A: Yes. The private sector LFP effect for daughters is comparable in magnitude to the public sector effect, with a 1 SD increase in parental exposure having approximately equal effects on LFP within public and private employment. There is also no measurable shift toward clerical occupations specifically, suggesting the channel is a broader change in attitudes toward women working, not transmission of information about specific government or clerical jobs.

Q: What is the effect on the gender earnings gap? A: A 1 SD increase in parental exposure to female co-workers closes the gender earnings gap among children of civil servants by 12%. This is not driven by differences in weeks or hours worked, but rather by daughters of exposed parents selecting into higher-paying and previously male-dominated occupations.

Q: How do the authors address the possibility that the results reflect local labor market conditions rather than parental exposure per se? A: By 1940, 67% of civil servant children lived in a city different from their parent’s WWI-era city. Even among children who moved to the same destination city — and thus face identical labor market conditions — variation in parental exposure at the origin city-by-department remains highly predictive of daughters’ LFP. Comparing children moving from the same origin city to the same destination city, those with parents in higher-exposure departments still show higher LFP, pointing to cultural transmission rather than local labor market demand.

Q: What do the marriage and fertility results indicate about mechanisms? A: Daughters of more exposed civil servants are less likely to be married (a 1 SD increase in parental exposure reduces the relative likelihood of daughters being married by 3.7 percentage points) and tend to have fewer children by 1940. A mediation exercise shows these observable differences in marriage, fertility, and education only partially explain the LFP increase; a statistically significant and economically large residual exposure effect remains, consistent with parental exposure shifting broader gender norms rather than only proximate determinants of labor supply.

Q: What does the spousal work decision evidence contribute? A: A 1 SD increase in male civil servants’ exposure to female co-workers increases the propensity of their subsequent wife to work by 0.5 percentage points after WWI. The effect is driven by marriages formed after the exposure and is not mechanically explained by men marrying their female co-workers. This revealed preference measure supports the interpretation that exposure changed men’s attitudes toward women’s work.

Q: What do naming patterns suggest about changing attitudes? A: Exposed parents are more likely to give daughters names that are less feminine — specifically, names with a lower share of vowels or less likely to end with a vowel — for daughters born after WWI. No comparable effect is observed for sons’ names. This provides supplementary evidence of a shift in paternal attitudes following workplace exposure to female co-workers.

Q: What are the aggregate city-level effects on female LFP? A: In a difference-in-differences design using cross-city variation in female federal worker exposure before and after WWI, a 1 SD increase in city-level exposure raises aggregate female LFP by 0.9–1.0 percentage points, with no effect on male LFP. The effect is persistent through 1940 and city-level exposure is uncorrelated with female LFP prior to WWI. A back-of-envelope calculation implies each additional female wartime entrant generated approximately 2.4 additional women entering the broader workforce — a social multiplier.

Q: Is there evidence of horizontal (non-family) transmission? A: Yes. The aggregate LFP gains are concentrated almost entirely in census enumeration districts where female wartime civil servants resided; neighboring districts without female entrants do not see comparable gains. Cities with greater increases in female federal employees also experienced faster growth in women’s club memberships, with this pattern appearing only after WWI and coinciding with the rise in female LFP. Both findings are consistent with social learning operating through residential proximity and community networks.

Q: How robust are the results to potential selection bias from imperfect census linking? A: The propensity of a civil servant’s child to be linked to the 1940 Census is — conditional on city and department fixed effects — uncorrelated with the parental exposure measure. The authors apply inverse probability weighting (IPW) to ensure the matched sample is balanced on baseline characteristics, and results remain virtually identical. Estimates are also stable across different linking strategies individually.

Q: What instrumental variable strategy is used and what does it find? A: The authors instrument for office-level female share change using the interaction of the 1915 clerical workforce share and an indicator for war-related departments — a pre-determined source of variation in the capacity and demand for female clerical workers. The IV estimates are consistent with the OLS main specification: parental exposure to female co-workers closes the children’s gender LFP gap.

Q: What is the policy implication regarding public sector hiring? A: The paper suggests that increasing gender representation within public sector employment can have labor market implications that extend well beyond the organization itself — across generations through vertical intergenerational transmission and across the broader community through horizontal social spillovers. The findings imply that public sector diversity policies can serve as a lever for broader, persistent reductions in gender gaps in the private labor market.

Office-level exposure: The city-by-department measure of the change in female share of civil servants between 1915 and 1919, capturing the granular intensity of each workplace unit’s contact with wartime female entrants; the interquartile range across offices is approximately 10 percentage points.

Intergenerational gender gap in LFP: The difference in labor force participation rates between daughters and sons of incumbent civil servants measured in 1940 adulthood, used as the primary outcome to capture whether parental workplace exposure transmits to children’s labor supply decisions.

Vertical transmission: The intergenerational channel through which exposed parents — identified here primarily as fathers, including those without working wives — convey changed attitudes or information about female work to their children, closing the gender LFP gap.

Horizontal transmission: The community-level channel through which the increased presence of female civil servants in a city spreads changed norms or information about women’s work to women who are not daughters of exposed co-workers, operating through residential proximity and social networks such as women’s clubs.

Social multiplier: The amplification of the direct effect of hiring female workers through behavioral spillovers; the authors’ back-of-envelope calculation estimates that each additional female wartime civil service entrant generated approximately 2.4 additional women entering the workforce.

Formative years: The period of adolescence during which children are argued to be most malleable in forming preferences and beliefs; exposure effects in this paper are concentrated among children who were teenagers at the time of parental exposure, with older children showing little effect.

Source text origin: The authors’ classification of whether a summary is based on full working paper text (pdf or oa-html) vs. abstract only; in this workflow, abstract-only is a hard block for summary generation.

Making the Invisible Hand Visible: Managers and Worker Allocation

Mon, 01 Jan 0001 00:00:00 +0000

This paper asks why managers matter for firm performance, and specifically whether managers improve productivity by matching workers to better-suited jobs inside firms rather than through supervision, motivation, or selection out of the firm. The setting is the internal labor market of a large private consumer goods multinational enterprise (MNE) operating in more than 100 countries, with annual turnover exceeding EUR 50 billion. The data cover the universe of white-collar workers and managers at the firm — 200,000 workers and 30,000 managers observed monthly over 11 years (January 2011 to December 2021) — linked to payroll, performance ratings, organizational chart, digital platform activity, employee surveys, and an independent sales productivity series for field sales workers in 15 countries.

The paper confronts two identification challenges. First, the author constructs a measure of manager quality — “high flyers” — defined as managers who were promoted to the first managerial work level (WL2) by age 30. This threshold yields 26.2% of managers classified as high flyers. The measure is defined entirely ex ante, before the manager ever supervises the worker under study, which addresses reverse causality. It is validated against ex post performance metrics including future salary growth, probability of promotion to WL3, performance ratings, and anonymous subordinate feedback. Second, to identify causal effects of manager quality on workers, the author exploits the firm’s long-standing policy of rotating WL2 managers laterally across teams as part of their career development, a practice implemented for several decades. Using an event-study design centered on the worker’s first manager transition, the author compares workers who transition from a low-flyer to a high-flyer manager (LtoH) against workers who transition from one low-flyer to a different low-flyer (LtoL), netting out the effect of the transition itself. Pre-event parallel trends are confirmed empirically.

The main findings are as follows. Gaining a high-flyer manager causes substantial reallocation of workers within the firm through lateral job transfers: seven years after the manager transition event, cumulative lateral moves are 40% higher for workers who gained a high-flyer manager relative to those who gained another low-flyer. These lateral moves are not confined to a single organizational margin — transfers rise within-team, across teams in the same function, and across functions — and they involve meaningfully larger shifts in task content, as measured by angular separation across O*NET cognitive, routine, and social task intensity dimensions, with cumulative task distance becoming statistically distinguishable from zero approximately seven quarters post-transition. These gains in lateral mobility translate into persistent wage growth: seven years after the manager transition, workers supervised by a high-flyer earn salaries 13% higher than the comparison group, with divergence beginning only after the transition date. Using independent sales bonus data, three years after gaining a high-flyer manager workers’ sales productivity increases by 0.347 standard deviations, ruling out the interpretation that wage gains merely reflect manager favoritism rather than genuine productivity improvement. Establishment-level data further show that sites with a higher share of workers under high-flyer managers display higher output per worker and lower operational costs per unit.

Effects are asymmetric: gaining a good manager has large positive effects, but losing one (comparing HtoL with HtoH transitions) produces no corresponding negative effects, implying that a single exposure to a high-flyer manager generates durable benefits that survive a subsequent downgrade in manager quality. A mediation analysis finds that 64% of the salary gain is explained by lateral job changes, though the author notes this understates the full allocation channel because it excludes vertical transfers and the gains from remaining well-matched in the current role. These findings hold under multiple robustness checks including restricting to new hires, using the Sun and Abraham (2021) interaction-weighted estimator, varying the age threshold for high-flyer classification, using a tenure-based alternative, and placebo tests with randomly assigned manager types.

The scope conditions are specific to white-collar workers at a large, organizationally homogeneous consumer goods multinational. All workers hold college degrees, mean firm tenure is 8.5 years, team sizes average five workers, and the firm has the same organizational structure across all countries, functions, and years.

Q: How does the paper define “high flyer” managers and what share of managers receive this classification? A: High flyers are managers who achieved the first managerial work level (WL2) by age 30, a threshold derived from continuous age estimates constructed from 10-year age bands in the personnel records. This definition yields 26.2% of managers classified as high flyers. The measure is time-invariant and defined ex ante relative to any interaction with the workers whose outcomes are studied.

Q: What validates the high-flyer measure as capturing genuine managerial ability rather than noise? A: The high-flyer classification is significantly positively correlated with multiple ex post performance metrics recorded after the manager’s own promotion: future salary growth, probability of subsequent promotion to WL3 (director level), annual performance ratings, and anonymous upward feedback scores from subordinates on leadership. High flyers are also 14.5 percentage points less likely to be mid-career recruits, suggesting they are internally developed talent rather than external hires.

Q: What is the source of identifying variation and how does the event-study design address endogeneity? A: The firm has operated a decades-long policy of rotating WL2 managers laterally across teams to broaden their experience and to screen candidates for promotion to WL3. These rotations are asserted by firm executives and HR representatives to be orthogonal to worker and team characteristics. The author verifies this empirically by showing that a wide range of team characteristics measured over the two years before a transition — including team performance, inequality, transfer rates, and team diversity — cannot predict the type of incoming manager. The event-study design compares workers who receive a high-flyer replacement (LtoH) against workers who receive another low-flyer replacement (LtoL), netting out any generic effect of a managerial change, and confirms parallel pre-trends.

Q: What is the effect of gaining a high-flyer manager on lateral job mobility? A: Seven years after the manager transition, workers assigned to a high-flyer manager exhibit lateral moves that are 40% higher relative to workers assigned to another low-flyer. These lateral moves occur across all organizational margins: within the same team, across teams within the same function (the largest contributor), and across functions. Beyond frequency, lateral moves under high-flyer managers also involve larger task-content shifts, with cumulative task distance (measured using O*NET cognitive, routine, and social task dimensions via angular separation) becoming statistically distinguishable from zero approximately seven quarters after the transition.

Q: What is the wage effect of gaining a high-flyer manager and when does it materialize? A: Workers who transition from a low-flyer to a high-flyer manager earn a salary 13% higher than workers who transition to another low-flyer, measured seven years after the transition event. The divergence begins only after the transition date, consistent with the pre-event parallel trends assumption, and accumulates gradually rather than appearing as an immediate jump.

Q: Does the wage gain reflect genuine productivity improvement or simply managerial favoritism in pay decisions? A: The author uses an independent sales bonus series — based on monthly targets set by supply chain demand planning teams, not by managers — for 5,604 field sales workers in 15 countries from 2018 to 2021. Three years after gaining a high-flyer manager, workers’ sales productivity increases by 0.347 standard deviations. This confirms that pay gains correspond to actual productivity improvement rather than inflated ratings for unchanged performance.

Q: How much of the wage gain is attributable to the lateral reallocation channel specifically? A: A mediation analysis attributes 64% of the 13% salary gain to lateral job changes. The author cautions that this is a lower bound because the mediation excludes vertical transfers (which mechanically raise salary) and does not capture gains for workers who remain in their current job because it represents a good match rather than requiring reallocation.

Q: Are the effects symmetric — does losing a high-flyer manager reverse the gains? A: No. Comparing workers who transition from a high-flyer to a low-flyer manager (HtoL) against workers who transition from a high-flyer to another high-flyer (HtoH) reveals no corresponding negative effects. The gains from a single prior exposure to a high-flyer manager are persistent and are not undone by a subsequent low-quality manager. The author interprets this as evidence that a good match, once created, endures independently of the manager who created it.

Q: Does gaining a high-flyer manager raise the rate of worker exit from the firm? A: No. There is no statistically detectable effect on either voluntary exits (quits) or involuntary exits (layoffs), with null results that are not masked by heterogeneity across high- and low-performing workers. This rules out the interpretation that high-flyer managers improve measured outcomes of retained workers by selecting out underperformers.

Q: Do workers move into roles connected to their high-flyer manager’s prior network or follow their manager when the manager moves? A: No. There is no evidence that workers move into roles connected to the high-flyer manager’s prior colleagues; if anything, subordinates of high-flyer managers are less likely to make such moves. Workers also do not follow their high-flyer managers when those managers subsequently rotate to a different team. These findings rule out favoritism, social network access, and information-advantage explanations as primary drivers.

Q: How does the paper rule out on-the-job teaching (human capital transmission) as the primary mechanism? A: If high-flyer managers improved worker outcomes primarily by teaching workers to be more productive in their current job, the prediction would be reduced lateral mobility (workers become too productive to leave their current role). The observed pattern — substantially higher rates of lateral reallocation under high-flyer managers — is the opposite of this prediction, making teaching as the dominant channel unlikely.

Q: What does the manager behavior evidence show about how high flyers spend their time? A: Time-use data from a random sample of approximately 600 WL2 managers in 2019 show that high-flyer managers spend 19% more time in one-on-one meetings with subordinates and engage more in communication and multitasking activities relative to low-flyer managers. Their skill profiles also differ: high flyers are more likely to have strengths in strategy and talent management rather than project management, consistent with a more coordination-intensive and people-development-oriented style.

Q: What heterogeneity is there in who benefits from high-flyer managers? A: Effects are larger when managers and workers are in the same physical office (proximity facilitates talent assessment), when the organizational unit has a more diverse set of job roles (more matching opportunities), and for younger workers who are still discovering their comparative advantages. Critically, benefits are not concentrated among high-baseline performers: workers with low initial pay growth experience gains comparable to those of high performers, suggesting high-flyer managers uncover and deploy hidden talent broadly rather than accelerating only already-visible stars.

Q: Does high-flyer management aggregate to establishment-level productivity? A: Yes. Establishments where a higher share of workers are supervised by high-flyer managers show higher output per worker (tons per FTE) and lower operational costs per unit of output (operational costs per ton), measured using establishment-year data across approximately 150 sites globally over 2019-2021. This is consistent with the individual-level allocation mechanism producing aggregate productivity gains.

Q: What are the organizational design implications of the asymmetric effects? A: Because the gains from a single exposure to a high-flyer manager persist even after a subsequent manager downgrade, firms do not need each worker to be continuously supervised by a high-flyer. It is sufficient to rotate high-flyer managers across teams so that each worker receives at least one exposure. This makes the allocation mechanism resource-neutral relative to hiring, firing, or formal training programs.

High flyer (paper’s definition): A manager who achieved the first managerial work level (WL2) at the firm by age 30 — a time-invariant, ex ante classification representing the firm’s revealed-preference assessment of leadership potential, validated against subsequent salary growth, promotion probability, performance ratings, and subordinate feedback. Constitutes 26.2% of managers in the sample.

Internal labor market (paper’s usage): The system within the firm through which workers are allocated to jobs via lateral transfers and vertical promotions, mediated by managers rather than by external price mechanisms; the institutional context within which manager-worker matching produces wage growth and productivity gains.

Lateral transfer (paper’s usage): A horizontal reallocation of a worker to a different job title, team, subfunction, or function at the same work level, as distinct from a vertical promotion. Captured monthly in personnel records; operationalized as moves involving changes in task content measured by O*NET task distances.

Task distance (paper’s usage): The angular separation between origin and destination occupations across three O*NET task dimensions (cognitive, routine, and social intensity), ranging from zero (identical task profiles) to one (completely distinct profiles), used to characterize the substantive scope of lateral moves induced by high-flyer managers.

Manager rotation (paper’s usage): The firm’s longstanding policy of reassigning WL2 managers laterally across teams within a subfunction, designed to broaden managerial experience and screen for promotion to WL3; treated in the empirical strategy as generating plausibly exogenous variation in the manager type each worker encounters.

Allocation mechanism (paper’s usage): The process by which managers discover workers’ specific skills and match them to specialized jobs inside the firm, operating through lateral reallocation rather than through hiring, firing, or on-the-job training; identified in the paper as the primary channel through which high-flyer managers generate persistent wage and productivity gains.

Asymmetric persistence (paper’s usage): The empirical pattern in which the gains from gaining a high-flyer manager are large and durable, while losing a high-flyer manager (transitioning to a low-flyer) produces no corresponding negative effects on the outcomes of previously well-matched workers, implying that good matches, once formed, survive a change in manager quality.