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Title:The happiness gains from sorting and matching in the labor market PDF Logo
Authors:Luechinger, Simon
Stutzer, Alois
Winkelmann, Rainer
Issue Date:2006
Series/Report no.:IZA Discussion Papers 2019
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 reported satisfaction with life 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. 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.
Subjects:matching
ordered probit
public sector employment
selection
switching
regression
subjective well-being
JEL:D60
I31
J24
J45
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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