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

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  • Natalia Danzer

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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 sectorspecific job characteristics. A natural experiment —the massive privatization process inpost-Soviet countries—allows correcting potential self-selection bias. Industry-specificprivatization probabilities are assigned to workers based on unique individual-level surveyinformation regarding pre-determined Soviet jobs during the 1980s. The results reveal acausal public-sector satisfaction premium and a negative selection of individuals intothe public sector. Part of the public-private satisfaction gap can be explained by thedifferent availability of fringe benefits in the two sectors.

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Bibliographic Info

Paper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Paper No. 169.

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Date of creation: 2013
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Handle: RePEc:ces:ifowps:_169

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Keywords: Public sector; job satisfaction; self-selection; quasi-experiment; privatization; fringe benefits.;

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Cited by:
  1. Volker Meier & Ioana Cosmina Schiopu, 2012. "Optimal Higher Education Enrollment and Productivity Externalities in a Two-Sector Model," CESifo Working Paper Series 3889, CESifo Group Munich.
  2. Antonio Di Paolo, 2012. "(Endogenous) occupational choices and job satisfaction among recent PhD recipients: evidence from Catalonia," Working Papers XREAP2012-21, Xarxa de Referència en Economia Aplicada (XREAP), revised Dec 2012.
  3. Marcus Klemm, 2012. "Job Security and Fertility: Evidence from German Reunification," Ruhr Economic Papers 0379, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

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