A behavioral portfolio approach to multiple job holdings

Jaroslava Hlouskova, Panagiotis Tsigaris (), Anetta Caplanova () and Rudolf Sivak ()
Additional contact information
Anetta Caplanova: University of Economics in Bratislava
Rudolf Sivak: University of Economics in Bratislava

Review of Economics of the Household, 2017, vol. 15, issue 2, No 14, 669-689

Abstract: Abstract In this paper we present an alternative explanation of multiple job holdings. It is based on a behavioral portfolio approach using prospect theory. Multiple job holdings is often a result of economic hardship but also because of peer comparisons. Workers may decide to take on a risky job like self-employment and engage into new ventures but also hold on to a safe employment in order to stay as close as possible to their reference level. While multiple job holdings might be the case for some, many others might decide to keep on working only at a safe job and do not engage into new risky ventures. This paper presents a behavioral economics model to explain such decisions. We find that the decision to hold multiple jobs depends on the degree of loss aversion, the value of the reference level and on the expected return in the risky venture. The worker will not seek for a risky job if she has an income reference level equal to what she can earn from a safe job. At any other reference level, the worker will seek new ventures provided she is compensated with a higher expected wage and is sufficiently loss averse.

Keywords: Multiple job holdings; Risk taking; Prospect theory; Reference level; Loss aversion (search for similar items in EconPapers)
JEL-codes: D81 E24 J2 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://link.springer.com/10.1007/s11150-015-9293-x Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:reveho:v:15:y:2017:i:2:d:10.1007_s11150-015-9293-x

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11150/PS2

DOI: 10.1007/s11150-015-9293-x

Access Statistics for this article

Review of Economics of the Household is currently edited by Shoshana Grossbard

More articles in Review of Economics of the Household from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().