%0 Report %A Danzer, Natalia %T Job Satisfaction and Self-Selection into the Public or Private Sector: Evidence from a Natural Experiment %D 2013 %8 2013 Sep %I Institute of Labor Economics (IZA) %C Bonn %7 IZA Discussion Paper %N 7644 %U https://www.iza.org/index.php/publications/dp7644 %X 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. %K public sector %K job satisfaction %K self-selection %K quasi-experiment %K privatization %K fringe benefits