Quality of Employment and Job Satisfaction: Evidence from Chile

This paper investigates in detail the determinants of job satisfaction in a developing country. Two main results emerge from our analysis. Firstly, we show that as opposed to the empirical evidence from industrial countries, Chilean self-employed workers are more satisfied with their job than Chilean employees only after controlling for job protection and occupational hazard. Descriptive statistics suggests that this is a consequence of the poor job protection and poor job safety which are likely to characterize the self-employment sector in developing countries. Secondly, we show that once measures for procedural aspects of work are included in the regression, the utility premium from self-employment fully disappears. This provides strong evidence that procedural preferences for independence are not specific to workers from industrial countries and therefore they should be taken into account by development policies.