Economic Development According to Chandler by Federico Rossi

Join us for this week's Macroeconomics Research Seminar, Spring Term 2026.

Federico Rossi, from the University of Warwick, will present this week's Macroeconomics seminar on Economic Development According to Chandler.

Abstract

Chandler (1977) shows that large firms require hierarchies of white-collar workers to coordinate complex production. We document that this insight continues to hold globally today, and we show that low education levels in developing countries limit the supply of white-collar workers and constrain firm size. We extend the occupational choice model of Lucas (1978) to allow entrepreneurs to reorganize their firms by allocating administrative tasks to hired professionals, which brings the firm closer to constant returns to scale. We calibrate the model to be consistent with cross-sectional microdata and validate it using quasi-experimental and experimental evidence on the effects of educational expansions and management training interventions. Skills explain two-thirds of the reorganization of production into large firms with economic development, while structural transformation and reductions in barriers are needed to explain the remaining shift.

This seminar will be held on campus in 5B.307 at 1.30pm on Tuesday, 10 February 2026. This event is open to all levels of study and is also open to the public. To register your place, please contact the seminar organisers.

This event is part of the Macroeconomics Research Seminar Series.