Moonlighting and the Failure of Social Inclusion
Posted: 22 Mar 2012 Last revised: 1 Nov 2014
Date Written: March 1, 2012
The generations of productive and gainful employment are important agenda for social inclusion. To compute obligatory creation of new job vacancies for that agenda, governments try to estimate ‘socially optimal employment path over time’ for reference. In reality, computation of ‘socially optimal employment path over time’ is very difficult to materialize due to prevalence of generously proportioned moonlighting (simultaneous employment in more than one job) in the labour market. This paper is intended to show that asymmetric information about the propensity of moonlighting prevents national authority from fixing the socially optimal employment path.
The governments (or the planning authorities) calculate the socially optimal employment path over time’ by maximizing the expected increase in the real GDP due to the newly created vacancies. But creation of vacancies does not mean generation of employment. If a portion of newly generated jobs are acquired by the moonlighters, the actual increase in the level of employment will be less than the projected increase. The asymmetric information about the degree of drainage of newly generated jobs into the hands of moonlighters jeopardizes planners’ perception about the movement of employment growth over time. The estimated optimal path without taking into account (or falsely taking into account) the rate of job drainage due to moonlighting cannot reflect the social optimality. The deficiency in perfect information about the moonlighting propensity puts an impediment to the computation of socially optimal employment path. Therefore, the absolute success of the agenda for social inclusion through the generation of productive and gainful employment hindered due to numerous prevalence of moonlighting.
Keywords: Moonlighting, Social Inclusion, Planning
JEL Classification: J29, O17, P21, O29
Suggested Citation: Suggested Citation