DP13726 The Impact of CEOs in the Public Sector: Evidence from the English NHS

Author(s): Katharina Janke, Carol Propper, Raffaella Sadun
Publication Date: May 2019
Date Revised: May 2019
Keyword(s): CEOs, Hospitals, NHS, Public sector, style
JEL(s): H51, I11, L32, M12
Programme Areas: Labour Economics, Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=13726

We investigate whether top managers affect the performance of large and complex public sector organizations, using as a case study CEOs of English public hospitals (large, complex organizations with multi-million turnover). We study the extent to which CEOs are differentiated in terms of their pay, as well as a wide range of hospital production measures including inputs, intermediate operational outcomes and clinical outcomes. Pay differentials suggest that the market perceives CEOs to be differentiated. However, we find little evidence of CEOs' impact on hospital production. These results question the effectiveness of leadership changes to improve performance in the public sector.