Maria Schlier defends her PhD thesis at the Department of Economics

Candiate

Maria Schlier, Department of Economics, University of Copenhagen

Title

Empirical essays in Organizational economics

Supervisor

Professor Morten Bennedsen

Assessment Committee

  • Associate Professor Nikolaj Harmon Department of Economics
  • Professor Guido Friebel, Goethe University Frankfurt
  • Professor Mario D Amore, Bocconi University

Summary

This dissertation contains three self-contained Chapters in the field of organizational economics. Focusing on school principals, teachers, and CEOs, each Chapter casts light on ways having different leaders or being in different organizations has an impact on performance.

In the first Chapter, I provide evidence of a cause and a consequence of teacher absenteeism. First, I provide evidence that the presence of the school principal impacts the level of teacher absence in a school. I estimate this effect using principal hospitalization. As the principal temporarily separates from the school to be at the hospital, I check if the behavior of teachers is affected. The main advantage of this approach is that I can assess the importance of the principal when he or she leaves and returns to the same school, solving the problems of endogeneity that come from other specifications using fixed effects. I find evidence that one extra day of principal hospitalization leads to an increase of 0.02 teacher absent days. Then, I estimate the impact of teacher absence on students using a variation of the teacher added-value model with student fixed effects. In other words, I can see the variation of school grades within a given student and their exposure to different teachers with different levels of absenteeism, controlling for unobservable aspects of the student. I find evidence that, for a given student, having teachers with higher levels of absence is associated with lower grades.

In the second Chapter, co-authored with Morten Bennedsen, we investigate how organizational settings can affect the level of absenteeism in schools. We decompose teacher absenteeism in two dimensions, first, the extensive margin relating to the type of teachers that work in a given school and their drive and motivation; and second, an intensive margin relating to the school environment and their incentives and absence culture. We will provide evidence that institutional environment explain more than half the difference in teacher absenteeism between top and bottom schools. This effect is even larger when we focus on discretionary absenteeism, which we measure using absence days in conjunction with public holidays. In other words, teachers tend to adapt to the absence culture of their school. We also provide evidence that leadership matters in the level of absenteeism exploiting the rotation of principals across schools and the changes in absence levels. These results together provide evidence that institutional school settings play a vital role in teacher absenteeism.

In the third Chapter, co-authored with Morten Bennedsen, Amanda Goodall and Andrew Oswald, we provide empirical evidence that having a firm leader with longer experience in the firms' specific industry tends to produce higher returns on capital. This result is found using longitudinal data in Danish firms, collecting 17 year of previous work experience of CEOs. We are able to control for CEO fixed-effects and for firm fixed-effects. Our results indicate that every 13 years of extra CEO industry experience is estimated to add an extra 1 percentage point to the annual rate of return on a company’s assets. The size of this estimate is substantial statistically and in economic value.