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We examine personnel policies and careers in public agencies, particularly how wages and promotion standards can partially offset a fundamental contracting problem: the inability of public-sector workers to contract on performance, and the inability of political masters to contract on forbearance from meddling. Despite the dual contracting problem, properly constructed personnel policies can encourage intrinsically motivated public-sector employees to invest in expertise, seek promotion, remain in the public sector, and work hard. To do so requires internal personnel policies that sort “slackers” from “zealots.” Personnel policies that accomplish this task are quite different in agencies where acquired expertise has little value in the private sector, and agencies where acquired expertise commands a premium in the private sector. Even with well-designed personnel policies, an inescapable trade-off between political control and expertise acquisition remains.

We propose a methodology for estimating preference parameters in matching models. Our estimator applies to repeated observations of matchings among a fixed group of individuals. Our estimator is based on the stability conditions in matching models; we consider both transferable (TU) and nontransferable utility (NTU) models. In both cases, the stability conditions yield moment inequalities which can be taken to the data. The preference parameters are partially identified. We consider simple illustrative examples, and also an empirical application to aggregate marriage markets.