Hierarchies allow individuals to leverage their knowledge through others' time. This mechanism increases productivity and amplifies the impact of skill heterogeneity on earnings inequality. To quantify this effect, we analyze the earnings and organization of U.S. lawyers and use the equilibrium model of knowledge hierarchies in Garicano and Rossi-Hansberg (2006) to assess how much lawyers' productivity and the distribution of earnings across lawyers reflects lawyers' ability to organize problem-solving hierarchically. We analyze earnings, organizational, and assignment patterns and show that they are generally consistent with the main predictions of the model. We then use these data to estimate the model. Our estimates imply that hierarchical production leads to at least a 30% increase in production in this industry, relative to a situation where lawyers within the same office do not "vertically specialize." We further find that it amplifies earnings inequality, increasing the ratio between the 95th and 50th percentiles from 3.7 to 4.8. We conclude that the impact of hierarchy on productivity and earnings distributions in this industry is substantial but not dramatic, reflecting the fact that the problems lawyers face are diverse and that the solutions tend to be customized.

中文翻译：

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知识层次的回报

层次结构允许个人在他人的时间中利用自己的知识。这种机制提高了生产率，并放大了技能异质性对收入不平等的影响。为了量化这种影响，我们分析了美国律师的收入和组织，并使用Garicano和Rossi-Hansberg（2006）中知识层次结构的均衡模型来评估律师的生产率和收入在律师中的分布情况如何反映出律师的能力。分层组织解决问题的方法。我们分析了收入，组织和分配模式，并表明它们通常与模型的主要预测相一致。然后，我们使用这些数据来估计模型。我们的估算表明，分级生产导致该行业的产量至少增加30％，相对于同一办公室内的律师没有“垂直专业化”的情况。我们进一步发现，它加剧了收入不平等，将第95个百分位数和第50个百分位数之间的比例从3.7增加到4.8。我们得出的结论是，等级制度对这个行业的生产率和收入分配的影响是巨大的，但不是戏剧性的，这反映出律师面临的问题是多种多样的，而且解决方案往往是定制的。