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This chapter examines whether changes in return to education affect workers’ mobility between jobs. Employee panel data are used to study staff movement from the public sector to the private sector or vice versa from 1995 to 2005. It is found that in line with the situation in other advanced economies, the wage structure in the public sector in Israel is more compressed than that in the private sector, for employees with similar characteristics and in general, and that the difference widened during the period reviewed. Hence, the findings support the contention that the public sector compensates employees less for their skills than does the private sector. In addition, it is found that during that period the return to education increased in the private sector by about 1 percentage point more than in the public sector. In an analysis of those who switched from one sector to the other, our findings imply that if the return to education changed at the same rate in both sectors, the probability of highly educated workers moving from the public sector to the private sector would be 5 percent lower, and the probability of highly educated workers moving from the private sector to the public sector would be 2 percent higher.

How individuals allocate their time between work and leisure has important implications regarding worker well-being. For example, more time at work means a greater return to human capital and a greater proclivity to seek more training opportunities. At the same time, hours spent at work decrease leisure and depend on one's home environment (including parental background), health, past migration, and government policies. In short, worker well-being depends on trade-offs and is influenced by public policy. These decisions entail time allocation, effort, human capital investment, health, and migration, among other choices. This volume considers worker well-being from the vantage of each of these alternatives. It contains ten chapters. The first three are on time allocation and work behavior, the next three on aspects of risk in the earnings process, the next two on aspects of migration, the next one on the impact of tax policies on poverty, and finally the last chapter on the role of labor market institutions on sectoral shifts in employment.