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

  • Delfgaauw, Josse

    ()

    (Erasmus University Rotterdam)

  • Dur, Robert

    ()

    (Erasmus University Rotterdam)

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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4766.

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Length: 27 pages
Date of creation: Feb 2010
Date of revision:
Publication status: published in: Journal of Public Economics, 2010, 94(9-10), 654-660
Handle: RePEc:iza:izadps:dp4766
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