Comparative Advantage and Moonlighting

Stéphane Auray, David Fuller and Guillaume Vandenbroucke

No 2020-07, Working Papers from Center for Research in Economics and Statistics

Abstract: The prevalence of multiple job holders in the U.S. data is trending down since the mid 1990s, and cross-sectional data reveal two seemingly contradictory patterns regarding multiple job holders: (i) conditional on education the most productive workers are the least likely to hold multiple jobs; (ii) the most educated workers are the most likely to hold multiple jobs, even though they are the most productive. We develop an equilibrium model of the labor market to understand these facts. A dominating income effect explains both the negative correlation with productivity and the downward trend overtime, while a higher part-to-fulltime 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 and assess its ability to reproduce the 2017 data. There are three exogenous driving forces: productivity, number of children and the proportion of skilled workers. The model accounts for 64.1% of the moonlighting trend for college-educated workers, and 96.7% for high school-educated workers.

Keywords: Macroeconomics; labor supply; multiple job holders; productivity; full-time job; part-time job; comparative advantage; income effect. (search for similar items in EconPapers)
JEL-codes: E1 J2 J22 J24 O4 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2020-03-01
New Economics Papers: this item is included in nep-dge, nep-lma and nep-mac
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Related works:
Journal Article: Comparative advantage and moonlighting (2021)
Working Paper: Comparative Advantage and Moonlighting (2021)
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