Heterogeneity in Subjective Wellbeing : An Application to Occupational Allocation in Africa
Using an extraordinarily rich panel dataset from Ghana, this paper explores the nature of self-employment and informality in developing countries through the analysis of self-reported happiness with work and life. Subjective job satisfaction measur...
| Main Authors: | , , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/10/16840577/heterogeneity-subjective-wellbeing-application-occupational-allocation-africa http://hdl.handle.net/10986/12074 |
| Summary: | Using an extraordinarily rich panel
dataset from Ghana, this paper explores the nature of
self-employment and informality in developing countries
through the analysis of self-reported happiness with work
and life. Subjective job satisfaction measures allow
assessment of the relative desirability of different jobs in
ways that, conditional wage comparisons cannot. By
exploiting recent advances in mixed (random parameter)
ordered probit models, the distribution of subjective
well-being across sectors of employment is quantified. There
is little evidence for the overall inferiority of the small
firm informal sector: there is not a robust average
satisfaction premium for formal work vs. self-employment or
informal salaried work, and owners of informal firms that
employ others are on average significantly happier than
workers in the formal private sector. Moreover, the
estimated distribution of parameters predicting satisfaction
reveal substantial heterogeneity in subjective well-being
within sectors that conventional fixed parameter models,
such as standard ordered probit models, cannot detect:
Whatever the average satisfaction premium in a sector, all
job categories contain both relatively happy and disgruntled
workers. Specifically, roughly 67, 50, 40 and 59 percent
prefer being a small-firm employer, sole proprietor,
informal salaried, civic worker respectively, than formal
work. Hence, there is a high degree of overlap in the
distribution of satisfaction across sectors. The results are
robust to the inclusion of fixed effects and alternate
measures of satisfaction. Job characteristics,
self-perceived autonomy and experimentally elicited measures
of attitudes toward risk do not appear to explain these
distributional patterns. |
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