The changing distribution of job satisfaction

The distribution of job satisfaction widened across cohorts of young men in the United States between 1978 and 1988, and between 1978 and 1996, in way s correlated with changing wage inequality. Satisfaction among workers in u pper earnings quartiles rose relative to that of workers in the lowest quar tile, An identical phenomenon is observed among men in West Germany in resp onse to a sharp increase in the relative earnings of high-wage men in the m id-1990s, Several hypotheses about the determinants of satisfaction are pre sented and examined using both cross-section data on these cohorts and pane l data from the NLSY and the Ger man SOEP, The evidence is most consistent with workers' job satisfaction being especially responsive to surprises in the returns to observable skills, less so to surprises in the returns to un observables. The effects of earnings shacks on job satisfaction dissipate o ver rime.