The Choice of the Working Sector in Italy

Using the budget of Italian Survey by Banca d'Italia we analyse the sectoral choce of the Italian workers among the private, public and self-employed options. The choice is modelled using a trivariate probit which allows one to release the IIA hypothesis, imposed by the multinomial logit model. The validity of the IIA assumption is strongly rejected and a negative correlation between the utilities of working in the private and public sectors is found. Moreover, the significance of many individual specific variables in the estimated model supports the intuition of the existence some diversity among workers choosing the different sectors.