Not by bread alone: Public–private intersectoral gap in job satisfaction

Abstract

The choice of a workplace, in the public or private sector, is not accidental. The paper presents a study on the public—private intersectoral gap in job satisfaction (JS). Given the observed wage premium in the private sector, it can be assumed that there are non-monetary forms of compensation for the wage loss in the public sector. They are expected to manifest themselves in job safety during periods of recession, which might affect the intersectoral gap in job satisfaction. Evaluation on panel data with fixed individual effects allows solving the problem of self-selection into a certain sector. A study based on RLMS-HSE data shows that in the period 2002—2021 the intersectoral gap in job satisfaction, as well as its elements — satisfaction with the labour contract, salary and promotion, — was generally insignificant. This does not rule out self-selection into a particular sector but explains the low level of transitions between the sectors. A significant intersectoral gap in job satisfaction is revealed for less competitive groups in the labor market during crises. This is the evidence of negative self-selection. During the COVID-19 pandemic, women, young workers (17—34 years old), and at other times, workers over 55 years old employed in the public sector rated JS significantly higher. Negative self-selection into the public sector is more likely to be attributed to specific socio-demographic groups than to the entire sector. Wage, as well as its degree in comparison to the average one in the profession in the local labor market, affects the JS of public employees to a lesser extent. This suggests that public workers are less sensitive to monetary rewards and value job safety, self-realization opportunities and a sense of usefulness of work for society more.