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Transparency, Recruitment and Retention in the Public Sector

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Author Info
Clare Leaver
Gian Luigi Albano
Abstract

This paper argues that government should pay greater heed to recruitment and retention when designing performance measurement systems for bureaucracies. In the face of pervasive rigidities in public sector pay, internal performance measurement rewards quitters and scars stayers and therefore makes it difficult to recruit and retain. Full and immediate publication of performance minimizes the cost of initial recruitment but entails retaining and paying rents to poor performers. This is optimal only if skill differences are low and the value of public production is moderate: high enough to warrant recruitment but not so high that good performers are retained. Human capital objectives are typically better met by abstaining from performance measurement altogether or `stage-managing` its publication, suggesting that the current emphasis on incentives and accountability may be misplaced.

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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 219.

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Date of creation: 2004
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Handle: RePEc:oxf:wpaper:219

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Related research
Keywords: Performance Measurement Disclosure Information Management Sorting Wage Compression Public Sector

Find related papers by JEL classification:
D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
H10 - Public Economics - - Structure and Scope of Government - - - General
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. James Heckman & Carolyn Heinrich & Jeffrey Smith, 2002. "The Performance of Performance Standards," NBER Working Papers 9002, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Lawrence F. Katz & Alan B. Krueger, 1991. "Changes in the Structure of Wages in the Public and Private Sectors," NBER Working Papers 3667, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Courty, Pascal & Marschke, Gerald, 1997. "Measuring Government Performance: Lessons from a Federal Job-Training Program," American Economic Review, American Economic Association, vol. 87(2), pages 383-88, May. [Downloadable!] (restricted)
  4. Michael Waldman, 1984. "Job Assignments, Signalling, and Efficiency," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 255-267, Summer. [Downloadable!] (restricted)
    Other versions:
  5. Carol Propper & Deborah Wilson, 2003. "The Use and Usefulness of Performance Measures in the Public Sector," The Centre for Market and Public Organisation 03/073, Department of Economics, University of Bristol, UK. [Downloadable!]
    Other versions:
  6. George J. Borjas, 2002. "The Wage Structure and the Sorting of Workers into the Public Sector," NBER Working Papers 9313, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. repec:fth:prinin:282 is not listed on IDEAS
  8. James M. Poterba & Kim S. Rueben, 1994. "The Distribution of Public Sector Wage Premia: New Evidence Using Quantile Regression Methods," NBER Working Papers 4734, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. Thomas J. Kane & Douglas O. Staiger, 2002. "The Promise and Pitfalls of Using Imprecise School Accountability Measures," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 91-114, Fall. [Downloadable!] (restricted)
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  11. Richard Disney & Amanda Gosling, 1998. "Does it pay to work in the public sector?," Fiscal Studies, Institute for Fiscal Studies, vol. 19(4), pages 347-374, November. [Downloadable!]
  12. Caroline M. Hoxby & Andrew Leigh, 2004. "Pulled Away or Pushed Out? Explaining the Decline of Teacher Aptitude in the United States," American Economic Review, American Economic Association, vol. 94(2), pages 236-240, May. [Downloadable!]
  13. repec:rus:hseeco:122160 is not listed on IDEAS
  14. Mueller, Richard E., 1998. "Public-private sector wage differentials in Canada: evidence from quantile regressions," Economics Letters, Elsevier, vol. 60(2), pages 229-235, August. [Downloadable!] (restricted)
  15. McLaughlin, Kenneth J, 1990. "General Productivity Growth in a Theory of Quits and Layoffs," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 75-98, January. [Downloadable!] (restricted)
  16. Alessandro Pavan, 2004. "On the Optimality of Privacy in Sequential Contracting," Theory workshop papers 658612000000000067, UCLA Department of Economics. [Downloadable!]
    Other versions:
  17. Stinebrickner, Todd R, 2001. "A Dynamic Model of Teacher Labor Supply," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 196-230, January. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Gian Luigi Albano & Clare Leaver, 2005. "Transparency, Recuitment and Retention in the Public Sector," The Centre for Market and Public Organisation 05/132, Department of Economics, University of Bristol, UK. [Downloadable!]
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