Date Added: Feb 2010
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. The authors 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.