Comparative Advantage and Moonlighting

46 Pages Posted: 24 May 2019 Last revised: 25 May 2019

See all articles by Stéphane Auray

Stéphane Auray

École Nationale de la Statistique et de l'Analyse de l'Information (ENSAI)

David L Fuller

University of Wisconsin-Oshkosh

Guillaume Vandenbroucke

Federal Reserve Banks - Federal Reserve Bank of St. Louis

Date Written: 2019-05-24

Abstract

The proportion of multiple jobholders (moonlighters) is negatively correlated with productivity (wages) in cross-sectional and time series data, but positively correlated with education. We develop a model of the labor market to understand these seemingly contradictory facts. An income effect explains the negative correlation with productivity while a comparative advantage of skilled workers explains the positive correlation with education. We provide empirical evidence of the comparative advantage in CPS data. We calibrate the model to 1994 data on multiple jobholdings, 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 68.7% of the moonlithing trend for college-educated workers, and overpredicts it by 33.7 percent for high school-educated workers. Counterfactual experiments reveal the contribution of each exogenous variable.

Keywords: Macroeconomics, labor supply, multiple jobholders, productivity, full-time job, part-time job, comparative advantage, income effect

JEL Classification: E1, J2, J22, J24, O4

Suggested Citation

Auray, Stéphane and Fuller, David L and Vandenbroucke, Guillaume, Comparative Advantage and Moonlighting (2019-05-24). FRB St. Louis Working Paper No. 2019-16. Available at SSRN: https://ssrn.com/abstract=3393665 or http://dx.doi.org/10.20955/wp.2019.016

Stéphane Auray (Contact Author)

École Nationale de la Statistique et de l'Analyse de l'Information (ENSAI) ( email )

Rennes Métropole - Campus de Ker Lann
Rue Blaise Pascal
BP 37203- 35172 BRUZ Cedex
France

David L Fuller

University of Wisconsin-Oshkosh ( email )

800 Algoma Blvd.
Oshkosh, WI 54901
United States

Guillaume Vandenbroucke

Federal Reserve Banks - Federal Reserve Bank of St. Louis ( email )

411 Locust St
Saint Louis, MO 63011
United States
+1 314 444 8717 (Phone)

HOME PAGE: http://www.guillaumevdb.net/

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