published in: Journal of Labor Economics, 2005, 23 (3), 395-436
American business seems to be infatuated with its workers’ “leadership” skills. Is there such
a thing, and is it rewarded in labor markets? Using the Project Talent, NLS72 and High
School and Beyond datasets, we show that men who occupied leadership positions in high
school earn more as adults, even when cognitive skills are held constant. The pure
leadership-wage effect varies from four percent for a broad definition of leadership in 1971 to
twenty-four percent for a narrow definition in 1992, and appears to have increased over time.
High-school leaders are more likely to occupy managerial occupations as adults, and
leadership skills command a higher wage premium within managerial occupations than other
jobs. We find evidence that leadership skill has a component that is determined before high
school, but also find evidence that it is “teachable”.
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