Work choices under an earnings target: The case of multiple jobholding

REFERENCES 1.

Abt,

C. C. "The Responsibility,"

Social

Coyoration, pp.

Audit Technique for Measuring Social in ?&nag&g the Socially Responsible M. Anshen. New York: Macmillan, 1974,

ed.

92-122.

2.

Anshen, M., ed. New York:

3.

Baumol,

4.

Berle,

W. J. A. A.

kkmaging Macmillan, Business

Power

the Socially 1974. Behavior,

Without

The Twentieth

5.

Responsible

Value

and Growth.

Property. Century

Corporation.

London,

Capitalist

New York,

1959.

1960.

RevoLtion.

London,

1955. , and G. C. Means. The Modern Property. New York, 1932.

6.

7.

Bowen,

H. R. Social Harper & Bros.,

Responsibilities 1953.

8.

Brown,

C. "Organizing for Managing the SociaZZy New York: Macmillan,

9.

Child,

J. Allen

10.

Davis,

K., and R. L. and Responsibility.

11.

de Hoghton, Eleven

12.

Dent,

13.

Dearborn, D. C., and H. A. Simon. the Departmental Identification vol. 21, 1958, pp. 140-143.

14.

Drucker,

15.

Eels,

the

Businessman.

Thought--A

Critical

The Company: New York:

The Practice

R., and C. Walton. Homewood, Illinois:

New York:

Environment

Law, Structure and Refom Macmillan, 1969.

Correlates Psychology,

of the Vol.

in

Goals of Business 12, 1959, pp. 365-393,

"Selective Perception: A Note of Executives," Sociometry,

of Management.

London:

Conceptual Foundations Richard D. Irwin, Inc., 89

London:

Analysis.

Blomstrom. Business and Society: New York: McGraw-Hill, 1975.

J. K. "Organizational Personnel Managements."

P.

of

and Private

Socially Responsible Management," in Responsible Corporation, ed. M. Anshen. 1974, pp. 92-122.

British Management and Unwin, 1969.

C., ed. Countries.

Corporation

Heinemann,

of Business. 1961.

1961.

of

94

. The general

esting

utility

insights

difficulties

into

maximization the

in explaining

Wilensky

(32),

Mott

(20,

(25,

57-59)

for

the

pp.

suggest cial

multiple

that

multiple

pressures"

goods

made simultaneously,

such feelings

to arise,

"leisure

pressures"

The emphasis notion

of

making

on their

jobholding predetermined

part.

within

concerning

the

or we would

but

For

example,

(15,

pp.

113-115),

(10,

pp.

model

assumes,

inter-

will

have

studies

by

and Perrella for

extent,

exceeding of time

both

it

255-256)

to a large greatly

expect

therefore,

it.

allocation

as that

Taiwan, by "finan-

economic

and purchases

we would

"financial

of

not

expect

pressures"

and

to be felt.3

should

pressures" earn.

The purpose

such a sequential

earnings

Katona

aspirations

on "financial

how much they

of

is motivated,

and "consumption

If

time

80-83),

provide,

phenomenon;

U. S. and by Freedman

rewards." were

aspects

jobholding

decisions

would

jobholding

other pp.

model

target.4

3Moreover Becker's (2) model on one's behavfor is time, so that sure) time pressure" only.

indicates

This

implies

of this

paper

model

of work

We are not suggests we would

that

people

a sequential

interested

multiple

under here

some

decision-

is to explain choices

have

a

in the

precise

that the ultimate constraint expect people to feel "(lei-

4The idea that an earnings target motivates behavior was suggested More recently, Mack (18) suggested that by Veblen (31, p. 81) long ago. tke traditional consumption-income relationship on the household's level Moreover, it was used to explain backward-bending should be reversed. supply of labor (Vatter [303), as well as the "added worker" hypothesis of the effect of business cycles on labor force participation of married It also appeared in Winch's (34, especially women (Mincer C19, pp. 74-751). p. 23) discussion of the welfare meaning of GNP. A semiearnings target appeared in Carlsson, Robinson and Su's (7) discussion of short-run consumer behavior, in Carlsson and Robinson's (5) discussion of inflation and multiple jobholding, and in Barzel and McDonald's (1) discussion of labor supply.

95 process,

important

as it

is determined. static

model.

work for

It

and it

multiple

finding

of

compatible

with

In the making and its

section in this

we provide

an empirical

In a sixth

section

in the test

might Previous

behavior.

be a function

one-period

most appropriate (25,

pp.

59-61)

jobholding

This of the

accomplishments

theory

is

is of

interest

work

choices In the

the

model

by its

own

and multiple fifth

implication

section

of the

jobholding

with

decision

model.

is

some final

not

a

remarks.

AND THE EARNINGS TARGET

which

in Galbraith's

emphasizes

the It

in wants-creation. pp. 300-301) suggests

predetermined raised

of the

we present

why multiple

Effect,"

especially

nature

seems to be implicit

and salesmanship 15,

for

one important

DECISION-MAKING

"Dependence

consumer

the

section

And we conclude

pp.

(e.g.,

is

section.

explain

decision-making

in Katona's

itself

to short-run

of multiple

latter

fourth

of

phenomenon.

advertising

third

implications

A sequential

modern

this

sequential

(The

we briefly

152-160)

as referring

Perrella's

the

In the

statics

are discussed

(11,

that

target

us to use a simple

phenomenon

exposition.

jobholding

SEQUENTIAL

model

we discuss paper.

Comparative

more widespread

that

earnings

a view.

diagrammatic

right.)

for

likely

in the

the

proper

phenomenon.

turnover

next

assumed

is quite

such

in which

interpret

jobholding

a high

be,

therefore,

One could

choices, the

is,

might

expectations

that

role

is explicit

psychological work

effort

consumption and gave

needs rise

of

theory (= income) or wants. to

new,

of

96 yet

unsatisfied,

wants.

money to satisfy

their

are feasible. which

lead

new wants

Thus,

theories,

if

exert they

families

are likely

together

with

us to assume that

problem

of

"Funds"

could

ble,

efforts

to make more

perceive

that

to have

be obtained wealth,

either

such

advances

an earnings

are then

the

problem

becomes

that

achieving

the

earnings

The assumption

a limited

are usually

only

target

of

stream

of

above,

run,

a

expenditures.5

nonwage

income

and

the

consumption

of less

these

sources

are no longer

is

regarded

and the work

feasi-

or because

as too

high.

individual's

effort,

desired

Work

(or

or "pain,"

their

family's)

while

target. an earnings for

The capital

small

short

been exhausted

run)

minimizing

was cited

in the

by using

all

solution,

that

access

that

short

to be relevant

jobholders).

determined

have already

in the

that

at least

and by reducing

they

efforts

is likely

face,

finding

by borrowing,

assume

because

(especially

the

an already

But we shall

price

people

"financing"

available

goods.

only

will

is reality-oriented. These

the

Families

to

compared

many people

market it.

target

is

(even

imperfect

Nonwage to the

motivates

income

stream

if

they

work are

choices not

multiple

and individuals

have

and accumulated

wealth

of expenditures,

and wealth

5As the writer was once a dual jobholder, presumably for this introspection played a role in formulating the model. very reason, An additional indication that people think in those terms are wage demands which are based on the need to earn a "decent standard of living."

97 might

be held

avoid

as much as possible

the

current

in illiquid

stream

future

conditions.

in the

short-run

suggested

affected

28-32)

This

view

e.g.,

draws

Burk

and Duesenberry

(9,

previous

expenditures

financed

in the

(installments) 14-15)

services

goods

taxes)

in the at a price;

make adjustments;

pp.

the

impose

current

period

is

p.

98),

of

living

and is

and habits.

popularization

sociological

of

theories

and Young

determine

(33,

pp.

of this

111

they

now a given

flow

of payments

is

documented

method

In addition,

a flow

of "operating These

that

price

is

i.e.,

they

will

follow

previous

(consump-

that

time.

as well.

current

extent

And it

and if

on them by their

given

been

standards

Willmont

To the

there

importance

might

(13,

standard

decisions

be met.

over

has already

Hicks

from

largely

14-15).

by loans, must

concerning is

a well-known

71-77),

two channels.

has increased

durable

imposed

past that

that

pp.

consumption via

is

some support

(4,

it

by social

Joneses"

"financing"

uncertainty

desired

extent

typically of

itself

Ch. 5), one's

the

point.

tion)

that

up with

the

First,

especially

"keep

Second,

only

pp.

due to

reasons:

to a large

and findings;

pp.

(31,

will

as a source

of expenditures

(determined)

The phrase

113),

several

people

dissaving

expenditures

for

(9,

Moreover,

using

The stream

by Veblen

Duesenberry

that

of

forms.

high

decisions.

of

in Klein

buying

goods

previous costs" costs

enough, a pattern

were

(16, and

purchases (e.g.,

could people

of

property

be avoided Will

of expenditures

not

98 Third,

the

in economic

theory,

a constant earning

permanent

flow power

unchanged,

income

might

hypothesis,

be interpreted

of consumption has changed,

at least

the

in the

which to

is well

imply

that

to a fluctuating

one.

desired

of

standard

established

people

prefer

Even though living

the

remains

short-run. THE MODEL

Let model,

us assume, that

there

an aggregate

are only

consumption

tions

cause

matic

presentation.

little

oe.-!::L its

cne--we

get

(job)

depend

on the

The

iarter

eramoie, of work (For

the

monetarv might

ti.ne

time

in the

reward

leisure

activity

self-employed

on the

if this

time reward

there

time

and by Yi

is

to

for

in that likely

holds

be the

of any work

activity,

is a diminishing

relationship

activity,

obtained spent

assump-

us to use a diagram-

Earnings work

activity,

These

activity--assumed

in that

(= wage rate)

monetary

ith

leisure

activities.

and allow

Y3 = 0.

spent

leisure-income

an aggregate

and two work

by definition

the marginal in that

goods:

spent

For the

depend

conventional

in generality6

earnings.

third

in the

four good,

loss

+_. the

zi

(tota:)

marginal

as is done

ti, each work

activity

and on the unit

of

acti:-:

to decline marginai as a matter

th

time. For

witi,

iours

productivity. of definition.)

6 Aggregation of leisure activities or market goods means that we ignore the effects of their allocation to the various consumption activiLi+j SP the allocation of time to work activities. Such effects are or.lbabl; 0t d secondary importance. The limitation of the number of wt'rk actlvlties to two is not inappropriate for most people, and generaiization of the discussion to the -n activities case is straightforward.

99 In addition,

the marginal

be affected it

might

bly

by the

work

as well earnings

general

form

as of from

(real)

both

and the

we find

worthwhile,

differently. the

leisure

of maximizing

his

(1)

X",To)

subject

work

between will

might For

activity.

example,

and possi-

activity.

be a function

V(tI,t2; to the

to maximize

Thus,

of total

the

hours

two activities.

be written

his

consumption

and time

expenditure it

a little

to eliminate that

activity

productivity

first

activities

aggregate

money income

problem,

in the

allocation work

work

marginal

might

is assumed

consumption

problem

their

other

the

reward

of any work

in the

most

as Y = Y(tI,t2).

activities

conventional

in the

activities

The individual time

reward

reduce

monetary

of both

of work

spent

fatigue,

the marginal

Total

time

increase

earnings

monetary

constraints

constraint.

activity,

subject

the

three

to the

as the

purpose

fixed

of

our

the maximization

constraint the

over

as well

to write

the t3,

good

For the

however, Using

utility

(t3

individual's

= To - tI problem

- t2) becomes

utility

earnings

E U(tI,t2,T" target

- tI

and work

time

- t 2; X0) constraints,

(2)

and (3)

respectively,

(2)

W,,t,),;

(3)

tl

PX'

- A0

+ t2 2 To

as well

as the

usual

desired

amount

of the

nonnegativity composite

constraints consumption

tI,t2 good,

2 0. P is

its

X0 is

the

price

index,

100 A0 is

nonwage

or leisure

income,

the

assumption

and the

constraints

for

above

Casual

problem

i.e.,

necessary

suggest

that

the

$+

available

for

imply

function

convex,

either

at

least

target that

the

(1)

work

for

time

conditions

a maximum.

constraint

some leisure

constraint for

is quasiconcave

Kuhn-Tucker

and sufficient the work

consume

earnings

utility

(3) (t3

(2)

any work

A&O i

where

time

are

are

conditions

(4)

the

and (3)

people

assume that

Kuhn-Tucker

that

(2)

observations

effective; also

total

activities.7

Under

the

and To is

is

is

> 0).

not If

effective,

activity

we the

i

i=1,2

i

X is the

marginal

utility

of money,

g

is the

marginal

(dis)utility

i from

work

in the

from

work ing

ith

there.

equation

(4)

individua

1 works

in activity (4)

I,

it

and the

is clear

av/atk , av/atj q - av/atj

the

individual

is

Q as well--the

equality

various

activities

utility)

is the

marginal

monetary

that

inequality

holds

an individual

> 0 if

if

will

reward

the

he does work

not.

in

k if

(5)

and if

and g

It can be shown'that X > 0, and if g av that xi< 0. The equality in (4) holis

implies

From equation activity

activity

(work)

of earning

k=l j=2 or k=2 j=l a multiple will

the

hold.

jobholder--i.e., By allocating

in a way which last

dollar

equalizes

in these

works his the

activities,

in activity

work

time

"pain" the

to the (=loss

of

individual

71f the model were to apply to the family, tI would have been the work hime. Instead of (3) we husband's work time and t the wife's t. < T. (i=1,2). The discussion would have two work time ? onstraints below would have followed with almost rl~o change.

101 minimizes

total

("earnings

'1Pain"

conventional

av = q.av

=I-

where condition

fixed

that

specialize;

i.e.

, will

jobholding,

(maximum)

the

constraint

work

activities,

occur

even

work

activity. It

First,

substitute

for

the

discussion

is

multiple

individual.

identity

The maximization variables,

WK in Figure

maximum combinations

a case

work

is

a slope

of time

spent

problem of view whenever

of -1.

Second,

will

have

The line

in work

will

the

activities

in be

emphasis

of

when dealing for

with

a change by the

comparative

therefore,

be

an analytical 1 with

The work

might

- (3)

this

to handle

in Figure

axes.

from

(1)

chosen

and might,

we

at any

reasons

tools

presented

on the

of work

activities

diagram

rewards jobholding

in the

solution the

and t2,

l--has

hours

mathematical

problem tI

on his

choices.

of the

assume an internal In such

inappropriate.

multiple

point

to explain

But once

nonmonetary

be interested

individual

activities.

diagram

work

the

as WI # WE,

to an institutional

maximization

leisure-income

The conventional problems

decision

the

= Wi,

In order

that

a methodological

we might

and/or

and/or

discretion

&

assumptions

in work

assumes

As iong

jobholder.

suggests

on short-run

jobholding number

the

activity.

above

of work

(4)

that

had to resort

illustrate

from

our

the

monetary

one has full

to

1.th

the

literature

marginal

is useful

a diagram.

static

sum of money

one actually

assumed

be a single

equation

if

of

under

on hours

diminishing

in the

needed

model,

is usually

wage rate

implies

multiple

line

it

(4)

allow

(given)

leisure-income

In addition

Wi is the

will

the

target").

In the that

Of earning

time

is the

the

value. two

constraint-locus

which

of

COnfOrm

102 to

(3)--i.e.,

when t

3 = 0. Line ER represents locus of minimum combinations

It is the

line. yield

at least

the

aY/ati

> 0,

its

of the

line

is

were

required

slope not

constant,

it

The indifference

would

straint

t3 = To - tI

generally

tions

of

for

multiple

convex (or

exact

below

both). the

internal

problem

and the

earnings

In the

(1)

space

- (3)

the

of tI

a multiple activity

2.

two work

activities

monetary

utility

spending if

were of

equal

is area

time

con-

av < 0, I order condi-

second

- (3),

we expect target

concave

that

line

from

is

below

hold.

not

not

hold

av is -qatp

earnings

does

to -WI/W2.

to the

slope

are

shape

and t2 which

conditions

- (3) set

(Figure the

of

Of course,

reward

Assuming

suffer

empty.

between

the

from

an

The feasible work

time

line.

Therefore,

jobholder,

both

shaded

and t2

The individual

that

feasible

target

a slope

(1)

the curves

(1)

(convex)

is at A, where

satisfied.

ginal

the

origin.

(2).

From the

problem

indifference

maximization

line

to

< 0 its

either

1 we assume

1 is

the

to the

to occur,

inconsistency,

toward

av/atl

In Figure

in Figure

and t2 which

according

is unknown.

solution

set

tI

of tI

varying

Since

or the

with

combinations

(leisure)

shape

jobholding

from

If

t3 -t2.

an internal

been linear

describes

with

its

of

target

E < 0, but generally the exact 1 I at2 If the wage rate in both work activities

have

curve

constant,

according

earnings

is - $-

known.

utility

but

earnings

the

the

l),

utility

solution

to the

is maximized Figure

1 ends

ty at work

up at A.

tastes

more

in favor

of activity

that

activity

were

relatively

as we move

individual's

and the

activity

individual's

increases

constraints

are

He prefers

to be

1 and ti with

problem

at work

respect

2, or if higher,

the

to the marthe

103

Figure UTILITY

MAXIMIZATION

1

UNDER AN EARNINGS TARGET

E’ W

R K

R’

t,

104 individual work

might

activity

relatively cases

have ended

1 relatively

more,

more at the he does

not

up in Figure

margin,

want

or that he might

first

consumption

the

following

aspirations,

income

neighborhood);

increase

in the

price

p;

(1)

the

individual

the

1.

While

shapes

assume would

of the

original

Y(tI,t2)

is

that always

as in the earnings

in general

case target

set

ties.

lines

tends

the

1 the

not moonlight to raise

8 Note

that tion expenditures, also change the as well as their

multiple

Suppose

the

would

have

earnings of latter

before

marginal

in the to a higher (3)

an monetary

these

becomes

changes,

E'R'

in

relationship

target

lines, This

monetary

rewards

case

the

between we shall

and t2.

In that

assumption

two

were

constant,

(linear)

been parallel.8 target

single occurs. might

In both

marginal of

it

no necessary

in tI

wage rates.

in the

possibility

In Figure

who did

homogeneous if

of fixed

is

A;

in both

As a result

and new earnings

be fulfilled

The increase sible

there

paid

R.

moved income,

a decline

$$$- and $$-, by the same rate. 1 2 earnings target line moves upward.

Figure

up at

an increase

in nonwage

(4)

have

CONSIDERATIONS

rewards, the

would

jobholder.

if

a decline

index,

activity

changes:

X (e.g., (2)

And had he liked

have ended

to be a multiple

SOME COMPARATIVE STATICS Consider

1 at E.

might

jobholding In the be forced

exclude

from

the

in one or both general

case,

to do so now,

feaactivi-

some people and this

jobholding.

there is a difference between the change in consump21, and the other changes, since the former might level of dtility attached to the indifference curves, slope (X is a parameter in the utility function ClOl).

105 The higher

earnings

("pain"):

either

total

in the

high-paying

(at

increase. lated

Within into

cost

tend if

work

presented

activity

above

had we introduced

into

to

and/or want of

of

primary

to the

and the

hours

will

number

time

activities

to raise the

share

But

increased,

two work

or the

concerning

the desired

amount

total

implications

might

target the

model

increase

of work

margin)

of diversification

mum number If

the

the

transportation) former

hours

will

specific

phenomenon. the

target

job

might

be spent of

hours

(in

be an increase

the

individual

would

multiple does

than

the

not

offer

hiring

(additional)

at

least

one works

when the

in the

A similar

as or

or production),

if

minimum

jobholding

in search

that

to

be trans-

such factors

(e.g.,

like

jobholding.

wiT1

multiple

increased

would

both)

the

require

there

spent

cannot

the model

effort

time

this

in an activity

of work

of (or

individual

employer

latter

is larger

the

the

work

the some minithere.

earnings

probability

spend required. result overtime

9

that

in each of This

the

will

is obtained work

opportunities. This 1.

discussion

suggests

the

following

phenomena:

Higher consumption aspirations (or earnings target) when real nonwage income and real wage rates are unchanged cause a financial problem for the individual. Consequently, the probability that he will be a moonlighter This can explain the positive relationshio increases.

'The (fixed) cost element of diversification f8r the individual implies an earnings target constraint Y(t ,t ) 2 PX + B R + 5 R where R. equals unity if t. > 0 and zero \f ? = 0. The'r&sult*i$ 1, concavity from below of th& earnings target 4 n" the axes of Figure and this implies that an individual will moonlight only if he is going to work "enough" hours on his secondary job.

106 between moonlighting and the purchase of a home or plans to purchase some "luxury" goods (Wilensky [32, p. ill]), as well as the high moonlighting rate of married men (Mott C20, p. 831) and of men with large families (Perella C25, p. 601). 2.

Consumption aspirations, goods' prices, wage rates and nonwage income tend to increase over time. These factors affect the earnings target line and, therefore, multiple jobholding in the opposite direction. As a result, it is not surprising that the multiple jobholding rate in the U. S. is quite constant (around the 5 percent figure) with no apparent trend (Hayghe and Michelotti C12, pp. 43-441). The simple correlation between that rate and a linear time trend variable for the period 1956-1973 is nil (r = -0.08), and between the number of multiple jobholders per household (which is a somewhat better measure of supply than the multiple jobholding rate) and that trend variable is r = -0.37. Both results are not significantly different from zero at a 5 percent level.

3.

In an inflationary situation, given fixed consumption aspirations, the earnings target line will increase (decrease) if wage rate changes lag behind (lead) price changes. Our previous discussion suggests that in such a case there will be an increase (decrease) in multiple jobholding. Moreover, if people do not anticipate the intensification (weakening) of the inflationary process we shall expect a positive (negative) relationship between multiple jobholding and the Also, to the extent that some rate of increase in prices. expenditures are fixed in nominal terms, e.g., mortgage payments, the earnings tar-1 decline on that account And as long as wage rates increase during the inflation. this will reduce multiple jobholding.

Turning that

it

to a solitary

has two effects.

and following tiple

who worked

might

it

1 becomes in activity decide

it

in,

say,

reduces

the

discussion,

Second,

Activity only

First,

previous

jobholding.

steeper.

lighters

the

wage change

to work

causes

it the

relatively 2 might only

is

activity

1, we note

earnings

target

expected

earnings

to reduce

target

more attractive. begin

to moonlight,

in activity

1.

line

line; multo be

Some of but

The relative

those

some moon-

107 marginal

monetary

therefore,

reward

unpredictable.

up with

the

prediction

that

the

above

if

shape

effect

of

the

Only of

indifference the

discussion

holding

rate

for

those

and that

it

brevity,

time

available

Such a change nonmarket case,

could

work

earnings

target

analysis

of

the

discussion

But,

as the

occur

and there

could

proceed

prising

in view

can find concerning

of the

fact

is for

housework

out

(see

that

the

the job.

multiple

job-

2 might whose

primary

the

effect

job

of time

for

Becker

C21).

alone.

lines

If

as for there

This to

1. goods

in

In that in the from

our

only

1 changes,

a change

in &.

will

jobholding. 1 is assumed

of

activities,

no deviation

himself,

multiple

primary

by an increase

target

for

his

analyze

be almost

on similar

given

has increased).

and leisure

earnings

Note

then,

those

is,

we have ended

in activity

for

work

rate

rate.

that

not

seems to

in the

results

job

be accompanied

a change

definite

suggest

we shall

like

in L will

reader

will

primary

would

change

due to substitution

activities

an increase

no one will

of which

sake of

nil,

enough,

wage rate

For the

jobholding

jobholding

small

decreases

1 (the

in the

is

certainly

in activity

changes

were

multiple

above

whose

multiple

it

a lower

map,

case

is

if

wage increase

In that

increase,

on the

be only is

not

few sur-

be an ineffective

constraint. AN EMPIRICAL The earnings be easily

observed,

TEST:

MULTIPLE

target--assuming and it

JOBHOLDING AND DEBTS it

is certainly

motivates not

behavior--will

available

not

in any of the

108 data

collected

only

indirectly.

a proxy

so far.*.

We shall

for

paper,

the

the

the

higher

his

current

of the

higher are

likely

holds'

section

of one's

appealing

to

than

the

which

holding sion

(within

is

series

either

U.S.

number

of multiple

holding proxy

number

rate for

debt

or economy

growth

well

above

per is

household,

of house-

from

done by introducing

it,

and

aspirations

be "financed"

by work

of multiple

denoted MPJ, by the

private Controlling

job-

in a regres-

The dependent

household,

RDPH.

a more

proving

1956-1973 is utilized

real

phenom-

magnitude

observations)

divided is

jobholding

a

jobholding.

jobholders, per

he is

as by additional

hypothesis.

jobholders target

to

multiple

monthly

jobholders

earnings

corporate)

debt--as

period

that

in consumption model)

decisions),

relationship

Without

general

of multiple

(multiple

the

the the

here.

in this

therefore,

probability

to the

as

The discussion

same relationship

(more)

(sixteen for

to test

the

that

and,

multiple

an increase

include

data

in the

the

a larger might

analysis

the

debts

consumption

section).

and the

be tested

presented

a positive

related

derive

only,

more borrowing--i.e.,

Time

debt

one presented

intuition

be expected

efforts,

suggest

Put differently,

One could'

model

installments second

could

households'

to previous

the

then

above of

the

current

to be positively

debts. model

(due

(see

will

magnitude

expected

general

Within

debt

target

outlined

magnitude

target.

to be his

jobholder.

enon is

the model

use the

is one's

earnings

the

multiple

would

earhings

previous

between

Thus,

variable

by I& or the or the

multiple

employed),

m.

(individuals for

as a variable

jobThe

and nonthe

population

(when

necessary)

109 the

number

of households,

is

attempted

by the

a linear

time

combined

effect

tiple

unemployment

trend

variable,

(over

As stated

because

the

finding

more than

dependent

not

pure

supply

But

note

that

and the

1 is

variables. some of the

wage rate--which

to cause

a negative

The results a double-log

10

of

formulation

six

those

for

have

effect

effect

a positive

to have mainly

who succeeded

who wanted

effect

on mul-

to;

they

of TIME is not income, trend,

in are clear.

wealth,

are

expected

TIME.

regressions since

the

the

10

is expected

those

variables--nonwage

probably

effect

than

economy

to reflect

variables.

it

the

we introduce

supposed

have a negative only

Finally,

of

have a positive

include

rather

omitted

is

factor,

to

state

In addition,

omitted

H is a scale

variables

one job,

the

ROPH to

expected

the

IL.

which

of all

we expect Since

effect.

rate, TIME,

time)

above

jobholding.

a positive

H, and controlling

it

are

presented

proved

superior

in Table to the

I. linear

All

use

one.

are as the following: (1) The number of multiple multi le jobholding rate: various issues of the Monthly L&or Review; (8 p rivate (individuals and noncorporate) debt in billion dollars for the end of the calendar year: SurzJey of Current nosiness issues of May 1970, May 1973, and June 1974; (3) Unemployment rate (unadjusted for seasonality in the relevant month): Monthly Labor Review, October 1971, p. 40, for 1956-1971, Survey of Current Business issues February 1, 1974, and June 1974 for 1972 and 1973, respectively; (4) The number of households in thousands as of March: various issues of statistica Abstmcts of the u. s.; (5) Consumer price index (unadjusted) for the relevant month when 1957-1959 = 100: various issues of Survey of Current Eksiness. Data

jobholders

sources and the

The time variable assigns a value of one to the first observation, i.e., July 1956 = 1, and assumes that the next month should get the Thus, the second observation July 1957 gets the value of 2 and so on. The data for debts and households were transformed to the value of 13. relevant month under the assumption of a linear change within a period of twelve months.

110 All

eicept

regression

the

Cochrane-Orcutt

uses

statistic for

yields

all

the

absence

of

(in

serial

but which

percent

levels

sumption

in four

paper.

real

ment force

with rate

is

A glance least

toward

earnings

is

or 10 percent

at

of level.

significant levels

in four effect,

the

effect,

5 percent

The insignificance

a good proxy

and the

for

do show that

or 10

to changes

market

that

of variations

model

job-

presented

effect

assuming

the

effect

they of u is

that

the

conditions

in the

in

as re-

of a negative

in those

participation

con-

multiple

(17),

market

that

be interpreted

wage rate, of

labor

by labor

1 suggests

explanation

the

that

Kuch and Sharir

is responsive

affected

of

the model,

trend.

not

affect

of TIME might

of

e.g.,

to imply

target,

prediction

effect

claim,

the

hypothesis

at a 5 percent

interpreted

wealth

at Table

the

which

test)

RDPH is

or the

the

U. S. is quite

4

2, while

and u has a negative

income,

studies

regression

TIME has a negative

an important

participation

And various the

of

prediction

a positive

Regression

regressions.

The negative

nonwage

patible

5 percent

a two-tailed

effect

another

that

rejected

insignificant. (in

positively,

flecting

suggests

for

coefficient,

at the

aspirations,

holding

have

is not

significant

The positive

of

correlation

are

squares.

The Durbin-Watson

only

E has a positive

results

is

result it

test)

least

technique.

regressions

regressions.

these

this

iterative

RDPH has a positive

a one-tailed

of the

ordinary

an inconclusive

other

As expected,

4 utilize

all com-

unemploy-

when labor conditions. labor

force

i n

conditions.

empirical in the

model multiple

contributes jobhold

the n9

111 Table

I

REGRESSION ANALYSISOF MOONLIGHTING

U. S. 1956-1973

Dependent No. Variable

1

M

Explanatory Constant

RDPH

Variables H

TIME

14.713

(1.84)

0.729** -0.067 (2.50) (-2.94)**

0.083 (0.16) 0.240 (0.45)

2

M

11.425 (1.27)

0.561* (1.57)

3

MPH

0.142 (0.08)

0.267* -0.067** (0.60) (-2.67)

4

MPH

-0.057** (-2.17)

5.171

0.709

(0.89)

(1.31)

-0.199 (-1.52)

5

m

4.336 (2.85)

0.258* (1.75)

-0.05" (-2.04)

6

m

3.614 (2.05)

0.177 (1.00)

-0.036 (-1.44)

Note:

For explanations For additional

**,*

The coefficient is levels, respectively,

ll

-0.080 (-0.83)

-0.078 (-0.79)

-0.073 (-0.84)

R2

D.W.

0.730

2.03

0.746

1.86

0.405

1.54

0.393

1.56

0.243

1.72

0.286

1.74

and definitions of the variables see text. explanations and data sources see footnote 10. significant in the

at the 5 percent one- or two-tailed

and 10 percent test.

112

. phenomenon the

when m is used

Imost when 1 is used

rate

is defined

people

who actually

who are the

in our

is,

m is

not

a pure

with

not

that

dependent

variable

reasonable, scale is

supply

factor.

for

in the

U. S. over

variable

than

with

number

is

a long

our

empirical

fit

in the

number

of

of people

dependent--and

(This

as our model

better

MPH presented

to discount is

when -M is the

in

one reason

period

of

would model

why

time.)

require. does

It

not

perform

variable. the

This

jobholding

heavily

labor.

"explains"

Multiple

and E is the

M and k are

that

for

however,

one job

demand

surprising

No explanation dependent

than

and it

variable.

as m'= M/E,

Both

constant

therefore,

well

more

the

1 has been fairly Thus,

statistics

employed.

fame direction--on

variable;

as a dependent

hold

actually

as a dependent

the

so because

regressions

itself

with

so far.

It

possibility

that

effect

of E in those

the

it

M ?s a seems

is due to

the

regressions

insignificant. WHY MULTIPLE In view

target from

(at time

monetary

of the least

spent reward

diversification a more

widespread

in the

U. S. are

focus

JOBHOLDING IS NOT MORE WIDESPREAD

plausibility

in the

short-run),

in any work (for

the

assumptions

of decreasing

activity,

self-employed,

in work

multiple

jobholders. it

marginal

at least),

Only

warrants

of an earnings

and of diminishing

activities--i.e.,

phenomenon.

of our discussion,

of

about

at least

that

wonder

why

jobholding--is

not

of people

employed

5 percent

While

marginal

one might

multiple

utility

issue

a short

is not comment.

at the

113 Several

reasons

above,

the

data

coming

multiple

one job),

rather

sometimes

the

spent

for

37-81).

all

time

work

imposes

(i.e.,

those

who actually

get

the

individual

up)

situations

pay,

centrate While sufficient

spend

to

in other

work

jobs the

the

latter

effort

one could

reasons,

except

for

earnings

target

line

to

yield

to

with

search

In terms

might due to require

hours

on the

of

Fifth,

training

As a result, than

hours

of work

those

ones,

can

become concave

(from

below),

it

benefits,

primary might to con-

jobholder.

given

of Figure

and last

the

on the

to become a multiple

clear.

and

might

lower

reasons,

spending usually

Fourth,

component. be quite

of

and not

additional

first

Tandan

nonmonetary

suggest

the

(e.g.,

similar

job

point

[21,

Such costs

jobholding.

is

Oaxaca

e.g.,

number

time

activities

employers

some minimum

likely

the

wage rate

in work

jobholders.

multiple

Second,

attractiveness

or production,

in that

to make the

the

individual;

is declining

two jobs

the

"overtime"

on the

least

in more than

with

(e.g.,

variety

have a specific is

that

Third,

multiple

discourages

is likely

if

at

pay for

in be-

jobholders.

of money or time).

in hiring

also

if

terms

work

decreases)

workers

increase

becoming

costs

And this

still

(in

from

to

and even

premium

costs

costs

than

part-time

in one activity.

(set

wage rate

(rather

as mentioned

who succeed

be multiple

seems to suggest

for

some (additional)

on any job

who &to

increases

than

Such

fixed

job.

those

The evidence

some people

job;

jobholders

wage rate

deter

First,

to people

than

transportation

phenomenon.

pertain

Many workers

C29, pp.

that

so far

full-time

p. 1361).

for

collected

on a job.

higher

account

1, the

above above

be shown to cause and,

are

therefore,

the to

114 reduce

the

last

likelihood

reason

below),

that

assumes

and,

that

therefore,

become a multiple

multiple the

jobholding

indifference

reducing

once

will

be desired.

The

curve

is not

concave

the

chances

that

again

(from one will

jobholder. CONCLUDING REMARKS

The paper rewards

to vary

to-the

cussed,

in

assumes

that

Within

utility

various the

target

but

of

has been dis-

and empirical (as within

model),

multiple not

the jobholding

have to

argument.

Some implications

hypothesis

concerning

jobholding

contrary

(consumption)

a model

a framework

and one does

and the

on multiple

stream

theoretical

maximization

and monetary

jobs,

of such

such

choices;

nonmonetary

has been

resort

to

of that

the

effect

of

(indirectly)

and accepted.

problems

as the

of wage increases unchanged.

section.

rather

presented effects

in this of

The model might

than

cause

paper

shortening

in a primary

The discussion

considerations jobs

support..

been outlined,

The model

fourth

in the

"underemployment"

earnings

tested

it

of workers'

traditional have

of work

allows

The plausibility

general

result

which

seem to be considerable

its

conventional

model

hours model

and there

is the

a model

is given.

arguments

the

with

conventional

expenditures

the

presents

job

could

be used

of the

standard

when the

would

basically

could

also

people

to

in one full-time

job;

length follow

explain prefer

that working

or explain

to analyze work

of the the

week and work

reasoning

monetary

such

week is of

or utility

in two part-time why the

multiple

the

115 jobholding (on the

rate

is

primary

higher

aspect

Researchers

presentation

of the might

paper find

when dealing

with

Even if

the

target

to

earnings

world,"

it

might

incorporate

the

tary

reward

differentials

able

to draw

rigorously

"financing"

is

believed

surprisingly negative

the

is

work

for

paid

workers

that small income-tax

(two)

the model

will

allow,

relationship consumption

one might

obtain

disincentive experiments.

of the it

allows

and still

introduce

be

many periods

things,

borrowing

and work

level

and to explain

Within new insights effects

us

and mone-

among other

aspiration

work

least.

tool.

are to

between

and changed.

at

nonmonetary

activities,

as an analytical of

leisure-income

since

variable

work

the

description

assumption

both

the most

of view.

short-run

an inaccurate

of

probably

than

in the

pay to make that

This

is

point

more useful

were

diagram

formed

the model

choices,

among

it.

a given

such a level

diagram

extensions

and to "dynamize" more

than

a methodological

possibilities

a simple

The natural

of

from

the

diagram

"real

self-employed

job).

The diagramnatic novel

for

such an extended into

the

documented

to analyze efforts

in how

model,

(somewhat) recently

in

it

.

1.

2.

Barzel,'

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