Latest / The Productivity Podcast with Fexingo: Output, Efficiency, and Long-Term Economic Growth
The Hidden Productivity Cost of Managerial Overhead
Episode 15 of The Productivity Podcast digs into a surprising drag on American output: the ballooning ratio of managers to individual contributors. Since 1983, the number of managers per worker has grown by over 80 percent, yet productivity growth has slowed. Lucas and Luna explore a 2025 study from the National Bureau of Economic Research that isolates managerial overhead as a net negative on firm-level output, using data from 2,400 U.S. firms. They discuss why middle management expanded in the first place—blaming tax distortions, legacy hierarchies, and the Peter Principle—and what…
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