@TechReport{iza:izadps:dp7644, author={Danzer, Natalia}, title={Job Satisfaction and Self-Selection into the Public or Private Sector: Evidence from a Natural Experiment}, year={2013}, month={Sep}, institution={Institute of Labor Economics (IZA)}, address={Bonn}, type={IZA Discussion Paper}, number={7644}, url={https://www.iza.org/publications/dp7644}, 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}, }