Third sector staff happier than private sector counterparts, study finds

A report by Dr Martin Binder of the Berlin Social Centre is based on information submitted to the British Household Panel Survey between 1996 and 2008

Happy staff: but have they self-selected?
Happy staff: but have they self-selected?

People who work full-time for not-for-profit organisations are significantly happier than those in the private sector, a study has found.

The study, by Dr Martin Binder of the Berlin Social Science Centre, examined information submitted by 12,786 private sector workers and 966 third sector workers submitted to the British Household Panel Survey between 1996 and 2008.

The BHPS gives information about respondents such as gender, job and income, as well as measuring their overall wellbeing and job satisfaction levels.

Binder concludes that working in the third sector has a significant impact on life satisfaction and says the positive bump in overall happiness is a quarter of the size of the negative impact of being widowed.

In the report, Binder writes: "I find that working for a non-profit organisation leads to increased job and life satisfaction... Job satisfaction is robustly and significantly higher than in private firms."

The report says the positive effect of non-profit work "is smaller for life satisfaction but still highly significant".

It says the positive effect could be explained by third sector workers enjoying their day-to-day activities more and feeling that they are playing a useful role.

The study says there is no significant positive impact of working in the third sector on pay satisfaction, which Binder says in the report is plausible, given that charity workers tend to earn less than their private sector counterparts.

But the report says this does not stop them being happier with their jobs overall.

"Apart from their pay, individuals are more satisfied with all other dimensions of their job when working in non-profit organisations," the report says.

But in his conclusions, Binder warns that the results could be the result of self-selection – people who are more likely to experience the benefits of working in the charity sector might also be those who choose to work in the sector.

In the study, he says: "The question of self-selection needs to be further explored before one can generalise that everybody would be happier when working in the third sector."

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