The happiness gains from sorting and matching in the labor marketAlois Stutzer, Simon Luechinger and Rainer Winkelmann Working papers from Faculty of Business and Economics - University of Basel Abstract: Sorting of people on the labor market not only assures the most productive use of valuable skills but also generates individual utility gains if people experience an optimal match between job characteristics and their preferences. Based on individual data on subjective well-being it is possible to assess these latter gains from matching. We introduce a two-equation ordered probit model with endogenous switching and study self-selection into government and private sector jobs. In an analysis with data from the European Social Survey, we find considerable gains from matching amounting to an increase in the fraction of very satisfied workers from 53.8 to 58.8 percent relative to a hypothetical random allocation of workers to the two sectors. A companion analysis of data from the German Socio-Economic Panel shows that selection on unobservables is reduced once we include additional controls for preference heterogeneity. Keywords: Matching; ordered probit; public sector employment; selection; switching regression; subjective well-being (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bsl:wpaper:2007/01 Access Statistics for this paper More papers in Working papers from Faculty of Business and Economics - University of Basel Contact information at EDIRC. |
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