Aspirations in the European labour market

This paper delves into the effects of workers’ aspirations on the levels of the perceived job satisfaction, as well as the determinants of their aspiration goals. It rests on the idea that aspirations are determined both by individual and work characteristics and by a continuous comparison with the corporate and social environment. This can be a source of aspiration bias reducing or increasing the reported job satisfaction in the case of failure in achieving aspiration goals that generate frustration, or conversely gratification for exceeding set goals. Using a Two-tier stochastic frontier approach, we estimate the levels of aspiration bias in the European labour market, simultaneously assessing the effects of several individual and social environment characteristics on aspirations. We find that aspirations are statistically relevant to explain satisfaction: workers exhibit high levels of frustration, reporting a job satisfaction twenty percent lower than the level that would be in line with their wages, individual and job characteristics. Furthermore, worker’s aspirations increase with the presence of colleagues with the same job title, consistent with the mechanism of aspirations adjustment through social comparison. This framework is also useful to explain the gender-job satisfaction paradox, that is women report higher levels of job satisfaction than men although they are at a disadvantage in the labour market. Consistently with the idea that gender inequality has an effect on aspirations, individuals in male-dominated occupations have higher levels of aspirations than workers in mixed occupations, while individuals (conceivably women) in female-dominated occupations fix lower aspirations.