Free DP Download 16 May 2019: The Impact of CEOs in the Public Sector: Evidence from the English NHS

Wednesday, May 15, 2019

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

Katharina Janke, Carol Propper and Raffaella Sadun

CEPR DP No. 13726 | 10 May 2019

A new CEPR study of chief executives of NHS hospitals in England brings into question the effectiveness of leadership changes to improve performance in the public sector. The authors find little evidence of top managers having an impact on measures of hospital production including inputs, intermediate operational outcomes and clinical outcomes. This is despite big increases in pay relative to other staff (see Figure 1).

Public hospitals in England are large and complex organizations with multi-million turnover. This research explores the extent to which the people that lead them are differentiated in terms of their pay, as well as a wide range of hospital production measures. Pay differentials suggest that the market perceives chief executives to be differentiated, but the outcomes indicate few differences.

Figure 1: Annual means of pay for NHS staff by job type

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