Job Satisfaction and Self-Selection into the Public or Private Sector: Evidence from a Natural Experiment

Natalia Danzer

No 7644, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Are public sector jobs better than private sector jobs? To answer this question, this paper investigates observed differences in job satisfaction between public- and private-sector workers and disentangles the effect of worker sorting from the one caused by sector-specific job characteristics. A natural experiment – the massive privatization process in post-Soviet countries – allows correcting potential self-selection bias. Industry-specific privatization probabilities are assigned to workers based on unique individual-level survey information regarding pre-determined Soviet jobs during the 1980s. The results reveal a causal public-sector satisfaction premium and a negative selection of individuals into the public sector. Part of the public-private satisfaction gap can be explained by the different availability of fringe benefits in the two sectors.

Keywords: public sector; job satisfaction; self-selection; quasi-experiment; privatization; fringe benefits (search for similar items in EconPapers)
JEL-codes: J28 J31 J32 J45 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2013-09
New Economics Papers: this item is included in nep-lab, nep-lma, nep-nps and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Published - revised version published in: Labour Economics, 2019, 57(C), 46-62.

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Related works:
Journal Article: Job satisfaction and self-selection into the public or private sector: Evidence from a natural experiment (2019)
Working Paper: Job Satisfaction and Self-Selection into the Public or Private Sector: Evidence from a Natural Experiment (2013)
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