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

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  • Danzer, Natalia

    ()
    (Ifo Institute for Economic Research)

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.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7644.

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Length: 53 pages
Date of creation: Sep 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7644

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

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References

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Citations

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Cited by:
  1. Volker Meier & Ioana Schiopu, 2013. "Optimal higher education enrollment and productivity externalities in a two-sector model," Ifo Working Paper Series Ifo Working Paper No. 170, Ifo Institute for Economic Research at the University of Munich.
  2. 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.
  3. 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.

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