SORTING, SOCIAL COMPARISON AND WOMEN’S JOB SATISFACTION

Using linked employer-employee data for the UK we address competing explanations for gender gaps in job satisfaction. Previous studies have rationalized the puzzling greater satisfaction of women either by pointing out gender differences in competitive attitudes, or through differences in sorting across jobs and industries. Our data allow us to test both explanations within a unified framework. The employer-employee structure of the data enables us to control for workplace unobserved heterogeneity that drives sorting. Moreover, we exploit information on workplace average wages to investigate workers’ attitudes through the framework of social comparison within the firm. We show that while social comparison matters empirically, gender differences in social comparison are not enough to account for job satisfaction gaps. Instead, controlling for workplace heterogeneity resolves the puzzle, lending support to the sorting hypothesis.