Abstract

This paper investigates how workers’ aspirations affect perceived job satisfaction and how social comparison, and workplace gender composition shape these aspirations. It rests on the idea that aspirations are determined by individual characteristics and by a continuous comparison with the corporate and social environment, resulting in aspirational bias. This bias can reduce reported job satisfaction when aspirational goals go unfulfilled. Conversely, it can enhance job satisfaction through a gratification effect when goals are exceeded. Using a Two-tier stochastic frontier approach, we estimate the levels of aspiration bias in the European labour market, simultaneously assessing the impacts of several social environment characteristics on aspirations. The findings reveal that aspirations significantly contribute to explaining satisfaction. In addition, workers’ aspirations tend to increase in the presence of colleagues holding the same job title, indicating the role of social comparison in aspiration adjustment. This paper provides new insights to explain the gender job satisfaction paradox, i.e., that women report higher levels of job satisfaction than men despite being disadvantaged in the labour market. Consistent with the idea that gender inequality affects aspirations, individuals in male-dominated occupations have higher aspirations than those in mixed-gender occupations, while individuals in female-dominated occupations tend to have lower aspirations.