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Federal Reserve Bank of St. Louis
Comparative Advantage and Moonlighting
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.
Cite this item
Stéphane Auray & David L. Fuller & Guillaume Vandenbroucke, Comparative Advantage and Moonlighting, Federal Reserve Bank of St. Louis, Working Papers 2019-16, 24 May 2019.
- 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
Keywords: Macroeconomics; labor supply; multiple jobholders; productivity; full-time job; part-time job; comparative advantage; income eﬀect
This item with handle RePEc:fip:fedlwp:2019-016
is also listed on EconPapers
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