The US productivity slowdown, the baby boom, and management quality

This paper examines the relationship between the entry of the baby boom into the workforce and the productivity slowdown. Lucas (Bell J Econ 9(2):508-523, 1978) shows how management quality plays a role in determining output. The baby boom's entry into the workforce resulted in more managers from smaller, pre-baby boom cohorts. These marginal managers were necessarily of lower quality, leading to a drop in total factor productivity. As the boomers aged, this effect was reversed. A calibrated model of managers, workers, and firms suggests that the management effects of the baby boom may explain roughly 20% of the observed productivity slowdown and resurgence.