Public Sector vs. Private Sector: MPA Career Comparison

In 2022, 69.6 percent of people employed in the U.S. worked in the private sector, while 13.4 percent worked in the public sector (the remainder were self-employed or worked at nonprofit organizations), according to the U.S. Bureau of Labor Statistics (BLS).

Understanding the differences between the public sector and the private sector is critical for those seeking to choose an educational and career path that aligns with their interests. Each sector has defining characteristics that appeal to a range of individuals.

Anyone who is considering enrolling in a Master of Public Administration (MPA) degree program can benefit from exploring a public sector vs. private sector comparison and considering the types of careers that can be pursued in each sector. While it may be natural to assume that people who earn an MPA work only in the public sector, they actually pursue careers in both the public and private sectors.

What Is the Public Sector?

The public sector definition is simple: The public sector encompasses all government organizations at the federal, state and local levels. These organizations serve the public by providing services in a wide array of areas, such as:

Education
Security and public safety
Social services
Judicial services
Transportation
Infrastructure
Health services

While public sector organizations have no competitors, they still have an incentive to operate efficiently because they are entrusted with public funds.

Although the public sector is distinct from the private sector, the two often interact. For example, the public sector plays a role in regulating organizations in the private sector. Federal agencies such as the U.S. Food and Drug Administration and the Occupational Safety and Health Administration are actively involved in enforcing laws and regulations with which organizations in the private sector must comply. In addition, the U.S. Small Business Administration guarantees loans to help individuals launch businesses in the private sector.

What Is the Private Sector?

The private sector encompasses all for-profit enterprises that are privately owned by individuals or publicly traded on a stock exchange. The private sector definition includes every for-profit organization, from the smallest mom-and-pop businesses to the largest multinational corporations in the world.

Unlike the public sector, private sector enterprises are driven in large part by competition, which fuels their need to be efficient.

Although the private sector is not directly responsible for providing public services, it contributes to the economy through creating jobs, adding to economic growth, spurring innovation and providing goods and services that people demand. Private sector organizations also pay taxes, and the taxes they pay help to fund the public sector.

Differences Between the Public Sector and the Private Sector

Learning about the differences between the public and private sectors can help guide individuals when they select their potential career path.

The Public and Private Sectors Have Different Goals

Organizations in the public and private sectors strive to reach different goals. Specifically:

The ultimate goal of public sector organizations is to serve the public interest. Depending on the specific organization, this can take the form of anything from protecting the environment to promoting safety or educating children.
The ultimate goal of private sector organizations is to produce profits. To achieve profitability, these organizations invest in the people and things that can help them generate revenue. They also take risks based on their knowledge of the market and factors such as the actions of their competitors.

The Funding Sources for Public and Private Sector Organizations Differ

Organizations in the public and private sectors have different sources of funding. Specifically:

Public sector organizations appropriate and spend public funds. Public funds come from activities such as taxing individuals and organizations, issuing debt (for example, by issuing bonds) and imposing fees for certain services.
Private sector organizations raise funds through multiple channels. These organizations mostly raise funds by generating revenue, but they also are funded through activities such as private investing, issuing stock or procuring loans.

Organizations in the Public and Private Sectors Are Accountable to Different Parties

Organizations in both the public and private sectors are held accountable for their actions, but the parties to whom they are accountable differ. Specifically:

Public sector organizations are accountable to a wide range of parties. Organizations in the public sector are accountable to the citizens they serve, elected officials, owners of businesses and sometimes even international parties.
Private sector organizations are accountable to a more narrow range of parties. Organizations that operate in the private sector are accountable to the owners of the organization, members of their boards of directors and shareholders.

Organizations in the Public and Private Sectors Adhere to Different Accounting Standards

Organizations in the public and private sectors must comply with different accounting standards. Specifically:

Public sector organizations adhere to accounting standards designed specifically for the public sector. Federal agencies comply with accounting standards that the Federal Accounting Standards Advisory Board establishes. State and local agencies typically comply with accounting standards that the Governmental Accounting Standards Board establishes. In general, public sector organizations prepare financial reports that show how they manage the sources of their funds and how effectively they use those funds.
Private sector organizations adhere to accounting standards designed specifically for the private sector. The U.S. Securities and Exchange Commission has recognized the Financial Accounting Standards Board as the entity that establishes accounting principles for the private sector. In general, publicly traded companies are required to prepare financial reports containing certain information that is deemed critical to investors and other stakeholders.

Organizations in the Public and Private Sectors Have Different Employee Hiring and Compensation Structures

The ways in which organizations in the public and private sectors hire and compensate their employees differ. Specifically:

Public sector organizations generally handle personnel issues in accordance with civil service systems. Civil service systems set forth qualification requirements for various positions in public organizations, salary schedules for the positions in public organizations and requirements for employees’ performance reviews. Organizations in the public sector generally must adhere to the requirements of civil service systems in hiring, paying and managing their personnel.
Private sector organizations have more flexibility in hiring, reviewing and paying their employees. Although they must comply with the Fair Labor Standards Act and other labor laws, private sector organizations generally have greater flexibility in managing, reviewing and paying their employees than public sector organizations have.

Public Sector Careers in Public Administration

Earning an MPA can qualify individuals for a wide variety of roles in the public sector. Examples of public administration careers in the public sector are outlined below.

Budget Analyst

Budget analysts play a critical role in public sector organizations. Working in an office environment, budget analysts help organizations plan their finances and develop and monitor the organization’s budgets. They perform important tasks such as:

Creating departmental and organization-wide budgets
Reviewing budget proposals and ensuring that they comply with requirements
Discussing budget requests with legislators and the public
Crafting alternatives to budget proposals
Monitoring budgets to ensure the organization stays within its budgetary limits
Keeping organizational managers aware of the status of the budgets and funding levels
Projecting future budgetary needs

To succeed in the role of budget analyst, an individual can benefit from cultivating analytical skills, the ability to communicate well both orally and in writing, strong attention to detail and mathematical skills.

The BLS reports that budget analysts had a median annual salary of $84,940 as of May 2023. The BLS projects 4 percent job growth for budget analysts from 2023 to 2033. That growth rate aligns with the BLS’s projection of 4 percent job growth across all occupations from 2023 to 2033.

Urban or Regional Planner

Urban and regional planners create plans and programs for the use of land and facilities in specific jurisdictions. While most of them work for organizations in the public sector, private sector organizations such as architecture and engineering firms also hire urban and regional planners.

While urban and regional planners generally work in offices, they also travel to existing and potential job sites to conduct their work. Examples of the duties of urban and regional planners include:

Gathering input from government officials, the public and other stakeholders on land use and plans for development
Analyzing data from the field, market research, environmental studies and other sources for use in planning projects
Reviewing the feasibility of site plans and identifying any necessary changes
Making recommendations to approve or deny site plans
Remaining up to date on requirements specified in laws, building codes and regulations

Urban and regional planners benefit from developing strong skills in areas such as leadership, analytical thinking, communication and decision-making.

According to the BLS, urban and regional planners had a median annual salary of $81,800 as of May 2023. The BLS projects 4 percent job growth for urban and regional planners from 2023 to 2033.

Social or Community Service Manager

Social and community service managers oversee and coordinate programs dedicated to promoting the public’s well-being.

Depending on the programs they oversee, social and community service managers can work in any of a variety of settings, such as offices, shelters or clinics. Examples of the tasks they carry out include:

Identifying programs and services that can benefit a community
Overseeing the administration of certain social and community service programs
Assessing the effectiveness of these programs and making recommendations for improvement
Implementing outreach efforts to expand awareness of these programs
Crafting proposals for the funding necessary to provide these programs to the public

Working as a social and community service manager requires strong skills in areas such as problem solving, communication, management and analysis of program-related data.

The median annual salary for social and community service managers was $77,030 as of May 2023, according to the BLS. The BLS projects 8 percent job growth for this occupation from 2023 to 2033.

City Manager

City managers oversee all operations in their city. They work in offices but frequently travel to various departments within the city and other locations within the city’s jurisdiction. They carry out duties such as:

Overseeing the city’s budgets
Monitoring the programs the city provides
Reviewing the city’s use of resources
Enforcing the decisions of the city council
Hiring department heads
Representing the city in the media and at meetings of other organizations
Addressing citizens’ concerns

Effective city managers develop skills in areas such as delegation, communication, negotiation, problem-solving, diplomacy and critical thinking.

The BLS includes city managers in the top executives category, and top executives had a median annual salary of $103,840 as of May 2023. Top executives such as city managers are expected to see 6 percent job growth from 2023 to 2033, according to the BLS.

Private Sector Careers in Public Administration

Public administration careers are not limited to the public sector. Private sector organizations also benefit from the expertise of individuals with public administration expertise.

For those who have been weighing an MPA versus an MBA (Master of Business Administration), it is important to know that earning an MPA can qualify individuals for a range of careers in the private sector. Examples of MPA careers in the private sector are summarized below.

Compliance Officer

Compliance officers ensure that their organization adheres to all legal and regulatory requirements. While they typically work in offices, compliance officers can also work at various job sites to perform inspections. Examples of compliance officers’ responsibilities include:

Creating and implementing their organization’s policies and procedures related to compliance
Assessing and reducing risks related to noncompliance with laws and regulations
Conducting compliance assessments and compliance audits
Training employees about compliance
Investigating potential violations of laws and regulations
Documenting compliance findings, recommendations and other information
Assessing whether the organization’s compliance programs are effective
Remaining up to date on laws and regulations applicable to the organization

To be effective compliance officers, individuals need to cultivate skills in areas such as communication, problem-solving, attention to detail and organization.

The BLS reports that compliance officers had a median annual salary of $75,670 as of May 2023. Individuals in this profession are expected to see 5 percent job growth from 2023 to 2033, according to the BLS.

Human Resources Manager

Human resources managers fulfill their organization’s workforce needs, oversee the hiring of its employees and assist in strategic planning related to human resources.

Typically working in office environments, human resources managers carry out duties such as:

Ensuring that the organization capitalizes on the talents of its employees
Creating and overseeing employee benefits programs
Advising the organization’s leaders regarding human resources issues
Overseeing the organization’s recruiting and hiring efforts
Mediating employee disputes and carrying out disciplinary actions

Strong skills in areas such as communication, leadership, organization and decision-making help human resources managers do their jobs well.

Human resources managers had a median annual salary of $136,350 as of May 2023, and are projected to see 6 percent job growth from 2023 to 2033, according to the BLS.

Policy Analyst

While some might assume that policy analysts work only in the public sector, private sector organizations hire policy analysts to analyze the effects of policies on a company or an entire industry.

While working in office environments, policy analysts perform tasks such as:

Reviewing how policies and legislation can affect organizations
Analyzing data related to policies from sources such as focus groups or surveys
Summarizing policy analysis results in written reports
Drafting policy proposals that detail the potential costs and benefits associated with policies
Making presentations regarding policy analysis results

Policy analysts benefit from developing their creativity, critical thinking, communication and analysis skills.

The BLS groups policy analysts in the political scientist category, and political scientists had a median annual salary of $132,350 as of May 2023. According to the BLS, positions for political scientists are projected to grow 3 percent from 2023 to 2033.

Emergency Management Director

As with policy analysts, emergency management directors do not only work in the public sector. Private sector organizations such as hospitals, energy companies and manufacturers also hire emergency management directors.

Tasked with planning for many types of emergencies and natural disasters, emergency management directors conduct their work in office environments, but they also perform duties on-site at the locations where disasters or other emergencies occur. Examples of their responsibilities include:

Creating plans for emergency and disaster response
Coordinating with public safety officials and others on plans for responding to emergencies
Training staff on emergency response procedures
Developing damage assessments after emergencies and natural disasters have occurred
Applying for federal funds to conduct planning for emergency management
Maintaining the facilities an organization will use during an emergency

Working as an emergency management director requires strong skills in areas such as leadership, critical thinking, communication and decision-making.

According to the BLS, emergency management directors had a median annual salary of $83,960 as of May 2023, and are expected to see 4 percent job growth from 2023 to 2033.

Pursue a Career in the Public or Private Sector With a Public Administration Degree

Whether they choose to work in the public sector or the private sector, individuals who earn an advanced degree in public administration can pursue any of an array of career paths that offer meaningful work. Organizations in both the public and private sectors can benefit from the knowledge and skills professionals gain through a public administration education.

Individuals who are interested in a graduate education in public administration can explore Augusta University Online’s Master of Public Administration degree program to learn how it can help them achieve their career goals. With an online format that features internships as well as interactive and experiential learning opportunities, the program helps students gain real-world skills they can use in a rewarding career. Start working toward your career ambitions in public administration today.

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