Job-to-job transitions and the job satisfaction puzzle: a diff-in-diff analysis for eleven EU countries

This paper studies the impact of different types of job-to-job transitions (from salaried employment to self-employment, from self-employment to salaried employment, and within salaried employment) on job satisfaction. Considering the three types of job transition, allows us to separate the pure mobility effect from the type of employment effect. We design an identification strategy based on the diff-in-diff approach. This is possible because our panel data allow us to compare the same individuals before and after job-to-job transitions occur. Our findings indicate that individuals who move from salaried employment to self-employment increase their overall job satisfaction more than workers who carry out other types of job transitions, while the impact of job changes on satisfaction in other job domains is mixed. We also find heterogeneous interactive effects of previous unemployment spells and self-perceived skill mismatch with job transitions depending on the type of transition. While skill mismatch is more important in the transition from salaried employment to self-employment, previous unemployment is more important for job changes within salaried employment.