How and by how much do supervisors enhance worker productivity? Using a company-based data set on the productivity of technology-based services workers, we estimate supervisor effects and find them to be large. Replacing a boss who is in the lower 10% of boss quality with one who is in the upper 10% of boss quality increases a team’s total output by more than adding one worker to a nine-member team would. Workers assigned to better bosses are less likely to leave the firm. A separate normalization implies that the average boss is about 1.75 times as productive as the average worker.

Partnerships and profit sharing are often claimed to motivate workers by giving them a share of the pie. But in organizations of any significant size, the free-rider effects would seem to choke off any motivational forces. This analysis explores how peer pressure operates and how factors such as profit sharing, shame, guilt, norms, mutual monitoring, and empathy interact to create incentives in the firm. The argument that Japanese firms enjoy team spirit because compensation is linked to overall profitability is analyzed. An explanation for the prevalence of partnerships among individuals in similar occupations is provided. Copyright 1992 by University of Chicago Press.

Entrepreneurship requires energy and creativity as well as business acumen. Some factors that contribute to entrepreneurship decline with age, but business skills increase with experience in high-level positions. Having too many older workers in society slows entrepreneurship. When older workers occupy key positions, they block younger workers from acquiring skills. A theory is formulated and tested using the Global Entrepreneurship Monitor data. A one standard deviation decrease in a country’s median age increases new business formation by 2.5 percentage points, which is about 40 percent of the mean rate. Furthermore, older societies have lower rates of entrepreneurship at every age.

Gary Becker was an intellectual giant. No one had a greater impact on broadening economics and making its impact felt throughout the social sciences thanBecker. Indeed,MiltonFriedmanoncedescribedGaryBecker as the most important social scientist of the second half of the twentieth century. For those of us who knew him, he was themost creative thinker we ever encountered. It was his astounding imagination that made many of his early critics think of him as a heretic. They were correct: he was a heretic much like Luther, Copernicus, and Galileo, who transformed their worlds, just ashe transformedeconomics.Hebrought a rigorous and insightful approach to issues that were viewed as inherently noneconomic. Eventually, he won over the economics profession, detractors and all, who eventually became converts. Becker was a scientist in the true sense of the word.He believed that economics was useful only if it explained andhelped to improve theworld.He practiced what he preached and carefully analyzed all of the social problems he addressed. He was innovative yet rigorous, open to new thought yet disciplined in sticking to the established rules of analysis. Most importantly, he extended the boundaries of economics tomuch of social science.