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Little recent empirical work in economics or industrial relations has examined job satisfaction, despite its demonstrated correlation with labour market behaviour such as quits, absenteeism and productivity. This paper uses information from a study of 5000 British employees to investigate the relationship between three measures of job satisfaction and a wide range of individual and job characteristics. Notably, men, workers in their thirties, the well‐educated, those working longer hours and workers in larger establishments have lower levels of job satisfaction. The estimated job satisfaction equations are used to calculate a measure of the shadow wage and to provide some evidence that is consistent with the existence of non‐compensating differentials in the industry and occupational wage structure.