Moonlighting: A Sign of an Unstable Economy

The amount of Americans “moonlighting” or holding multiple jobs, is on the rise. While this can be aligned with an increase in the number of jobs available in the economy, multiple job holding can also signal an economy struggling to adequately accommodate the labor supply, therefore failing to create optimal labor-placement matches.

Most multiple job holders take up a second occupation due to necessity – of those surveyed by the BLS in 1997, 40% did so in order to afford household expenses. Often, these workers need full-time hours but are forced to take on two part-time positions instead due to lack of available placements. While one might expect those with lower human capital (perhaps less competitive in some job markets) to be especially susceptible to moonlighting, the data says the exact opposite. Education attainment and multiple job holding rates are positively correlated, signifying system-wide misalignment between labor supply and labor demand characteristics.

chart (1)An increase in multiple job holding can also have an effect on the natural rate of unemployment, as it can increase frictional employment. Due to the nature of part-time jobs, these employees don’t depend on their employers for benefits such as healthcare or pensions and thus may not feel as committed to staying in a certain placement. Further, employers are not contractually obligated to give their employees severance pay. Along with these, the emotional stress of accommodating multiple job schedules can lead to increases in the separation rate on both the employee and employer side. Multiple job holding also places a strain on the job finding rate. Candidates not only need to find an available job, but one that is compatible with their primary employment. Simply increasing the number of jobs available won’t remedy this effect on frictional employment.

Unfortunately, despite the possible impacts of multiple job holding, it does not always manifest itself in the two typical ways of measuring unemployment, making it difficult to quantify its effect on the economy as a whole. Respondents to the Current Population Survey, or household survey, likely wouldn’t include more “unofficial” secondary jobs, such as consultant work, online shops, and freelance assignments in their response, decreasing the reported number of multiple job holders. On the other hand, those working more “official” secondary jobs, such as bartending and real estate, would be counted as two separate employees under the Current Employment Statistics, or establishment survey, as explained in the BLS’ frequently asked questions. This double counting of multiple job holders could deflate unemployment statistics and further complicates attempts to determine the actual number of moonlighters.

Given both the negative implications associated with moonlighting and the difficulties in accurately measuring how often it occurs, economic policy should be focused on trying to decrease the need for employees to take on more than one placement. Not only does the stress of multiple jobs likely lead to less productivity on the part of the worker, the phenomenon indicates widespread inefficiency in the economy as a whole to accommodate its labor force. Therefore, an increased prevalence of multiple job holding can indicate an unstable economy and lack of optimization in worker-placement matches and should be avoided.

– Erin Sullivan

http://money.cnn.com/2016/05/17/news/economy/job-multiple-part-time/

https://www.bloomberg.com/view/articles/2015-06-26/the-mystery-of-the-multiple-jobholder

https://www.bls.gov/opub/mlr/2015/article/multiple-jobholding-over-the-past-two-decades-2.htm

https://www.bls.gov/web/empsit/cesfaq.htmhttps://www.bls.gov/opub/mlr/2000/10/atissue.pdf

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3 thoughts on “Moonlighting: A Sign of an Unstable Economy

  1. nickcolangelo94

    I think you brought up and analyzed a lot of really important issues regarding unemployment in the U.S. economy. I was definitely pretty surprised by the fact that educational attainment and moonlighting were positively correlated though, I would have thought the opposite to be the case.

    Reply
  2. daniellebwilson18

    I wonder what the cause for the rise in moonlighting is today. Have real wages gone down, or have costs of living increased? Is it possible that the steady rate of job creation since the crisis has led to lower wages, or that maybe the jobs created are not full-time positions? While the economy is nearing the natural rate of unemployment, how can the level of moonlighting be captured in the stated unemployment rate?

    Reply
  3. Victor Matheson

    I am actually not surprised that moonlighting is positively correlated with education. A economics professor can often make several hundred dollars per hour consulting. That’s a pretty strong incentive to moonlight.

    Reply

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