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Managerial Talent, Motivation, and Self-Selection into Public Management

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Author Info
Josse Delfgaauw () (Erasmus University Rotterdam)
Robert Dur () (Erasmus University Rotterdam, and IZA)

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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 and non-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 highest 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.

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Publisher Info
Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 08-097/1.

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Date of creation: 14 Oct 2008
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Handle: RePEc:dgr:uvatin:20080097

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Related research
Keywords: Public Management; Public Service Motivation; Managerial Ability; Self-Selection;

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Find related papers by JEL classification:
H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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