Data and Code for: The Missing Middle Managers: Labor Costs, Firm Structure, and Development

Using data obtained from human resources consulting firms, we document the cost to large firms of hiring managers and business professionals in 146 countries worldwide. The average pay in the poorest decile of countries is $18,000 per year, which is 9.7 times GDP per worker. In contrast, in the richest decile of countries, large firms pay managers and business professionals only 0.8 times GDP per worker. We use an appropriate technology model to show that the cost of management could be an important deterrent to the expansion of the modern sector in developing countries.