The Myth of the Permanent Job

"I want a lifetime post!" says comedian Checco Zalone in a movie. News are full of anecdotes about how much Italians yearn for public permanent employment. Does getting a public sector job make them happier than someone who is in private employment? With Alessandro Bucciol (University of Verona), we try to answer this question in our paper "Is there a happiness premium for working in the public sector? Evidence from Italy", recently published in the Journal of Behavioral and Experimental Economics.
The short answer is yes, but only for some. In our work, we analyze responses to the Bank of Italy's "Survey on Household Income and Wealth" from 2004 to 2016. As is common in the vast literature on economics and happiness, our measure of interest is stated happiness, in a scale ranging from 0 to 10. The question reads "Considering all the aspects of your life, how happy would you say you are?". In our work, we relate the subjective well-being of Italian employees to their economic conditions and their status as public or private employees.

We find evidence that better economic conditions lead to greater happiness. Public employment also brings greater happiness than private employment, but not for everyone! Only most economically disadvantaged employees report this advantage. Employees in medium or high economic conditions express similar happiness, regardless of the nature of their employment. To give an idea of ​​the importance of public employment, workers with a wealth of around €20,000 and public employment express similar levels of happiness with respect to workers employed in the private sector with a wealth of around €162,000. We surmise two reasons for this. First, the social prestige and job satisfaction given by public employment may be more relevant for workers who do not enjoy economic status. Second, the stability given by public employment may be more important for workers who would have greater difficulty in finding new employment in the event of dismissal, given that worse economic conditions are typically associated with less skilled jobs. In our data we find clues that suggest these two conclusions are reasonable. In particular, we observe that public workers with low economic conditions have spent a greater part of their working life in their current jobs, compared to private employees with low economic conditions. We do not observe the same difference for public and private workers with medium or high economic conditions. This suggests that public workers in low economic conditions exploit the greater stability given by public employment relatively more strongly than private workers.

In some editions of the survey we also find other clues that suggest greater perceived job stability and satisfaction of public workers compared to private workers, but still only for individuals in disadvantaged economic conditions. Finally, we find no differences in the happiness afforded by public employment between geographical areas or over time.
In conclusion, Italians love having a permanent job, but only if they live in disadvantaged economic conditions. In these conditions, the job stability and job satisfaction given by the public employment are more marked. This suggests a rational mechanism for the widespread propensity towards public employment, as opposed to purely psychological or emotional mechanisms being at work.