Although the wage differences between the public and private sectors in Serbia are well
researched, little is known on the differences in the overall quality of work between the sectors. In
this paper we aim to fill this gap, by analysing the differences in job satisfaction between the public
and private sector workers in Serbia, starting from a theoretical framework which views job
satisfaction as an operationalization of total utility from work. To analyse the differences in job
satisfaction we use nationally representative Survey on Income and Living Conditions (the SILC)
data from 2013 and Blinder-Oaxaca decomposition method. The results show that public sector
workers in Serbia, beside high public sector wage premium, also work in better working
conditions, and have higher levels of job satisfaction. Although higher levels of job satisfaction can
partially be accounted for by higher wages and better job characteristics of the public sector
workers, a part of the gap in job satisfaction remains unexplained by the variables available in the
SILC data. According to recent literature on job satisfaction these unexplained differences could be
contributed to lower stress, higher job security and higher levels of intrinsic motivation of public
sector workers. The results further support the notion of strong labour market duality in Serbia,
which causes micro level labour market distortions
