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Comparative Advantage and Moonlighting

Author

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  • Stéphane Auray
  • David L. Fuller
  • Guillaume Vandenbroucke

Abstract

We document three facts: (i) Higher educated workers are more likely to moonlight; (ii) conditional on education, workers with higher wages are less likely to moonlight; and (iii) the prevalence of moonlighting is declining over time for all education groups. We develop an equilibrium model of the labor market to explain these patterns. A dominating income effect explains the negative correlation of moonlighting with productivity in the cross section and the downward trend over time. A higher part-to-full time pay differential for skilled workers (a comparative advantage) explains the positive correlation with education. We provide empirical evidence of the comparative advantage using CPS data. We calibrate the model to 1994 cross-sectional data and assess its ability to reproduce the 2017 data. The driving forces are productivity variables and the proportion of skilled workers. The model accounts for 56% of the moonlighting trend for skilled workers, and 67% for unskilled workers.

Suggested Citation

  • Stéphane Auray & David L. Fuller & Guillaume Vandenbroucke, 2019. "Comparative Advantage and Moonlighting," Working Papers 2019-016, Federal Reserve Bank of St. Louis, revised Aug 2021.
    • Handle: RePEc:fip:fedlwp:2019-016
    DOI: 10.20955/wp.2019.016
    Note: Publisher DOI: https://doi.org/10.1016/j.euroecorev.2021.103897
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    Cited by:

    1. Etienne Lalé, 2019. "Search and Multiple Jobholding," Upjohn Working Papers 19-305, W.E. Upjohn Institute for Employment Research.
    2. Getahun, Tigabu D. & Fetene, Gebeyehu M. & Baumüller, Heike & Kubik, Zaneta, 2024. "Gender gaps in wages and nonmonetary benefits: Evidence from Ethiopia’s manufacturing sector," Discussion Papers 344126, University of Bonn, Center for Development Research (ZEF).
    3. Sum Lo Simon Ming, 2023. "Desired work-leisure balance in a partial equilibrium job search model with multiple job holding," IZA Journal of Labor Economics, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 12(1), pages 1-43, December.
    4. Philipp Lentge, 2022. "Second job holding in Germany – a persistent feature?," Working Paper Series in Economics 416, University of Lüneburg, Institute of Economics.

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    More about this item

    Keywords

    Macroeconomics; labor supply; multiple jobholders; productivity; full-time job; part-time job; comparative advantage; income effect;
    All these keywords.

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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