Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/36297 
Year of Publication: 
2010
Series/Report no.: 
IZA Discussion Papers No. 4766
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
The quality of public management is a recurrent concern in many countries. Calls to attract the economy's best and brightest managers to the public sector abound. This paper studies self-selection into managerial positions in the public and private sector, using a model of a perfectly competitive economy where people differ in managerial ability and in public service motivation. We find that, if demand for public sector output is not too high, the equilibrium return to managerial ability is always higher in the private sector. As a result, relatively many of the more able managers self-select into the private sector. Since this outcome is efficient, our analysis implies that attracting a more able managerial workforce to the public sector by increasing remuneration to private-sector levels is not cost-efficient.
Subjects: 
Public management
public service motivation
managerial ability
self-selection
JEL: 
H83
J24
J3
J45
Document Type: 
Working Paper

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