The Economics of Secondary Labor Market Participation

by Bernard D. Rostker, Robert Shishko

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A person holding two or more jobs is said to be moonlighting, or participating in the secondary labor market. This study helps to define some general factors associated with moonlighting. It investigates the determinants of the aggregate supply function in terms of demographic and market factors and describes the relationship between primary and secondary employment. To estimate a moonlighting supply curve, the authors employ a new database, the Income Dynamics Panel, and the Tobit technique for estimating relationships for limited variables. Based on the precept that willingness to take a second job depends on whether a person can work enough hours at his prevailing primary wage rate to satisfy his consumption goals, the investigation shows that individuals having relatively fixed consumption goals may be expected to have a backward sloping supply curve with respect to primary earnings. Such persons will reduce their commitment to the secondary labor market as they meet their goals.

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