Desired work-leisure balance in a partial equilibrium job search model with multiple job holding

Simon Ming Sum Lo

doi:10.2478/izajole-2023-0006

Abstract

Work-leisure balances are beneficial to society. A partial equilibrium job search model is developed to explain desired work-leisure tradeoffs for single-job holders and multiple-job holders. Significant work-leisure mismatches are found: 63% of the observations underwork by an average of 17 hours per week, while 37% overwork by 8.5 hours. The value of leisure is approximately four times the average hourly real wage when a single job is held, and it drops by one-third when multiple jobs are held. Models ignoring possibilities of multiple jobholding overstate the elasticity of leisure and understate the value of leisure.

References

Abdukadir, G. (1992). Liquidity constraints as a cause of moonlighting. Applied Economics, 24, 1307–1310.
Search in Google Scholar Back to article
Aguiar, M., Bils, M., Charles, K. K., and Hurst, E. (2021). Leisure luxuries and the labor supply of young men. Journal of Political Economy, 129(2), 337–382.
Search in Google Scholar Back to article
Altonji, J. G. and Paxson, C. H. (1988). Labor supply preferences, hours constraints, and hours-wage tradeoffs. Journal of Labor Economics, 6(2), 254–276.
Search in Google Scholar Back to article
Amemiya, T. (1973). Regression analysis when the dependent variable Is truncated normal. Econometrica, 41(6), 997–1016.
Search in Google Scholar Back to article
Attanasio, O., Levell, P., Low, H., and Sánchez-Marcos, V. (2018). Aggregating elasticities: Intensive and extensive margins of women's labor supply. Econometrica, 86(6), 2049–2082.
Search in Google Scholar Back to article
Auray, S., Fuller, D. L., and Vandenbroucke, G. (2021). Comparative advantage and moonlighting. European Economic Review, 139, 103897.
Search in Google Scholar Back to article
Averett, S. L. (2001). Moonlighting: Multiple motives and gender differences. Applied Economics, 33(11), 1391–1410.
Search in Google Scholar Back to article
Bannai A. and Tamakoshi A. (2014). The association between long working hours and health: a systematic review of epidemiological evidence. Scand J Work Environ Health, 40(1):5–18.
Search in Google Scholar Back to article
Bargain, O. and Peichl, A. (2016). Own-wage labor supply elasticities: Variation across time and estimation methods. IZA Journal of Labor Economics, 5,10.
Search in Google Scholar Back to article
Beauregard, T. A. and Henry, L. C. (2009). Making the link between work-life balance practices and organizational performance. Human Resource Management Review, 19(1), 9–22
Search in Google Scholar Back to article
Best, F. (1980). Exchanging earnings for leisure: Findings of an exploratory national survey on work time preferences. R&D Monograph No. 9. Washington, DC: U.S. Department of Labor, Employment and Training Administration.
Search in Google Scholar Back to article
Bils, M., Chang, Y., and Kim, S. (2012). Comparative advantage and unemployment. Journal of Monetary Economics, 59, 150–165.
Search in Google Scholar Back to article
Bingley, P., and Walker, I. (1997). The labour supply, unemployment and participation of lone mothers in in-work transfer programmes. The Economic Journal, 107(444), 1375–1390.
Search in Google Scholar Back to article
Bloemen, H. G. (2008). Job search, hours restrictions, and desired hours of work. Journal of Labor Economics, 26, 137–179.
Search in Google Scholar Back to article
Blundell, R., Duncan, A., and Meghir, C. (1998). Estimation of labor supply responses using tax policy reforms. Econometrica, 66(4), 827–861.
Search in Google Scholar Back to article
Blundell, R. and MaCurdy, T. (1999). Labor supply: A review of alternative approaches. In: Ashenfelter, O. and Card, D. (eds.), Handbook of Labor Economics, Vol. 3, 1559–695. Amsterdam: North Holland.
Search in Google Scholar Back to article
Bockstael, N., Strand, I., and Hanemann, W. (1987). Time and the recreational demand model. American journal of agricultural economics, 69(2), 293–302.
Search in Google Scholar Back to article
Burdett, K. (1978). A theory of employee job search and quit rates. The American Economic Review, 68(1), 212–220.
Search in Google Scholar Back to article
Chetty, R., Guren, A., Manoli, D., and Weber, A. (2011). Are micro and macro labor supply elasticities consistent? A review of evidence on the intensive and extensive margins. American Economic Review, Papers and Proceedings, 101, 471–475.
Search in Google Scholar Back to article
Chung, H. and Van der Lippe, T. (2020). Flexible working, work–life balance, and gender equality: Introduction. Social Indicators Research, 151(2), 365–381.
Search in Google Scholar Back to article
Clogg, C. C., Petkova, E., and Haritou, A. (1995). Statistical methods for comparing regression coefficients between models. American Journal of Sociology, 100, 1261–1312.
Search in Google Scholar Back to article
Cogan, J. F. (1981). Fixed costs and labor supply. Econometrica, 49: 945–63.
Search in Google Scholar Back to article
Collewet, M, and Sauermann, J. (2017). Working hours and productivity. Labour Economics, 47, 96–106.
Search in Google Scholar Back to article
Compton, A. (2019). A search theoretic model of part-time employment and multiple job holdings. MPRA Paper 97003, University Library of Munich, Germany.
Search in Google Scholar Back to article
Connolly, M. (2008). Here comes the rain again: Weather and the intertemporal substitution of leisure. Journal of Labor Economics, 26(1), 73–100.
Search in Google Scholar Back to article
Conway, K. and Kimmel, J. (1998). Male labor supply estimates and the decision to moonlight. Labour Economics, 5, 135–66.
Search in Google Scholar Back to article
Cox, D.R. (1972). Regression models and life-tables. Journal of the Royal Statistical Society: Series B, 34, 187–202
Search in Google Scholar Back to article
Creedy, J., and Kalb, G. (2005). Discrete hours labour supply modelling: specification, estimation and simulation. Journal of Economic Surveys, 19(5), 697–734.
Search in Google Scholar Back to article
Dickens, W. and Lundberg, S. J. (1985). Hours restrictions and labor supply. National bureau of economic research, Working Paper No. 1638
Search in Google Scholar Back to article
Dickey, H., Watson, V. and Zangelidis, A. (2011). Is it all about money? An examination of the motives behind moonlighting. Applied Economics, 43(26), 3767–3774.
Search in Google Scholar Back to article
Domeij, D., and Floden, M. (2006). The labor-supply elasticity and borrowing constraints: Why estimates are biased. Review of Economic dynamics, 9(2), 242–262.
Search in Google Scholar Back to article
Driver, B. L., Brown, P. J., and Peterson, G. L. (eds.) (1991). Benefits of leisure. Venture Publishing.
Search in Google Scholar Back to article
Erdogan, E., Bauer, T. N., Truxillo, D. M., and Mansfield, L. R. (2012). Whistle while you work: A review of the life satisfaction literature. Journal of Management, 38(4), 1038–1083.
Search in Google Scholar Back to article
Feather, P. and Shaw, W. (1999). Estimating the cost of leisure time for recreation demand models. Journal of Environmental Economics and Management, 38, 49–65.
Search in Google Scholar Back to article
Flinn, C. J. and Heckman, J. (1982). New methods for analyzing structural models of labor force dynamics. Journal of Econometrics, 18(1), 115–168.
Search in Google Scholar Back to article
González-Chapela, J. (2007). On the price of recreation goods as a determinant of male labor supply. Journal of Labor Economics, 25(4), 795–824.
Search in Google Scholar Back to article
Gørgens, T. (2002). Reservation wages and working hours for recently unemployed US women. Labour Economics, 9, 93–123.
Search in Google Scholar Back to article
Greene, W. (2012). Econometric Analysis (7th ed.). Pearson.
Search in Google Scholar Back to article
Guest, D. E. (2002). Perspectives on the study of work-life balance. Social Science Information, 41(2), 255–279.
Search in Google Scholar Back to article
Hahn, J. K., Hyatt, H. R., and Janicki, H. P. (2021). Job ladders and growth in earnings, hours, and wages. European Economic Review, 133, 103654.
Search in Google Scholar Back to article
Ham, J. C. (1982). Estimation of a labour supply model with censoring due to unemployment and underemployment. Review of Economic Studies, 49, 335–354.
Search in Google Scholar Back to article
Hausman, J. A. (1978). Specification tests in Econometrics. Econometrica, 46(6), 1251–1271.
Search in Google Scholar Back to article
Heckman, J. (1974). Shadow prices, market wages, and labor supply. Econometrica, 42(4), 679–694.
Search in Google Scholar Back to article
Heckman, J. (1976). The common structure of statistical models of truncation, sample selection, and limited dependent variables and a simple estimator for such models. Annals of Economic and Social Measurement, 15, 475–492.
Search in Google Scholar Back to article
Heim, B. (2007). The incredible shrinking elasticities: Married female labor supply. Econometrica, 56, 335–360.
Search in Google Scholar Back to article
Hlouskova, J., Tsigaris, P., Caplanova, A., and Sivak, R. (2017). A behavioral portfolio approach to multiple job holdings. Review of Economics of the Household, 15(2):669–689, 2017.
Search in Google Scholar Back to article
Hoynes, H. W. (1996). Welfare transfers in two-parent families: labor supply and welfare participation under afdc-up. Econometrica, 64(2), 295–332.
Search in Google Scholar Back to article
Jansen, N., Kant, I., van Amelsvoort, L., Nijhuis, F., and van den Brandt, P. (2003). Need for recovery from work: evaluating short-term effects of working hours, patterns and schedules. Ergonomics, 46(7), 664–680.
Search in Google Scholar Back to article
Judge, T. A. and Watanabe, S. (1993). Another look at the job satisfaction-life satisfaction relationship. Journal of Applied Psychology, 78(6), 939–948.
Search in Google Scholar Back to article
Kahn, S. and Lang, K. (1991). The effect of hours constraints on labor supply estimates. The Review of Economics and Statistics, 73, 605–611.
Search in Google Scholar Back to article
Katz, L. F., and Krueger, A. B. (2019). The rise and nature of alternative work arrangements in the United States, 1995–2015. ILR review, 72(2), 382–416.
Search in Google Scholar Back to article
Keane, M. and Moffitt, R. (1998). A structural model of multiple welfare program participation and labor supply. International Economic Review, 39(3), 553–589.
Search in Google Scholar Back to article
Keane, M. and Rogerson, R. (2012). Micro and macro labor supply elasticities: A reassessment of conventional wisdom. Journal of Economic Literature, 50(2), 464–476.
Search in Google Scholar Back to article
Kimmel, J. and Conway, K. (2001) Who moonlights and why? Evidence from the SIPP. Industrial Relations, 40, 89–120.
Search in Google Scholar Back to article
Koenker, R. and Hallock, K. (2001). Quantile Regression. Journal of Economic Perspectives, 15, 143–156.
Search in Google Scholar Back to article
Kostyshyna, O., and Lalé, E. (2022). On the evolution of multiple jobholding in Canada. Canadian Journal of Economic, 55(2), 1095–1134.
Search in Google Scholar Back to article
Krishnan, P. (1990). The economics of moonlighting: A double self-selection model. The Review of Economics and Statistics, 361–367.
Search in Google Scholar Back to article
Kröll, C. and Nüesch, S. (2019). The effects of flexible work practices on employee attitudes: evidence from a large-scale panel study in Germany. The International Journal of Human Resource Management, 30(9), 1505–1525.
Search in Google Scholar Back to article
Krueger, A. B. (ed.) (2009). Measuring the Subjective Well-being of Nations: National Accounts of Time use and Well-being. University of Chicago Press.
Search in Google Scholar Back to article
Kudoh, N. and Sasaki, M. (2011). Employment and hours of work. European Economic Review, 55(2), 176–192.
Search in Google Scholar Back to article
Lalé, E. (2020). Search and multiple jobholding. IZA Discussion Papers, 12294, Institute of Labor Economics (IZA).
Search in Google Scholar Back to article
Lancaster, T. (1990). The Econometric Analysis of Transition Data. Cambridge University Press, Cambridge.
Search in Google Scholar Back to article
Larson, D., and Shaikh, S. (2001). Empirical specification requirements for two-constraint models of recreation choice. American Journal of Agricultural Economics, 83(2), 428–440.
Search in Google Scholar Back to article
Lewis, S. (2003). Flexible working arrangements: Implementation, outcomes, and management. International review of industrial and organizational psychology, 18, 1–28.
Search in Google Scholar Back to article
Lloyd-Smith, P., Abbott, J., Adamowicz, W., and Willard, D. (2019). Decoupling the value of leisure time from labor market returns in travel cost models. Journal of the Association of Environmental and Resource Economists, 6(2), 215–242.
Search in Google Scholar Back to article
Mancino, A. and Mullins, J. (2019). Frictional adjustment to income tax incentives : An application to the earned income tax credit. Working papers.
Search in Google Scholar Back to article
Mankiw, N. G., Rotemberg, J. J., and Summers, L. H. (1985). Intertemporal substitution in macroeconomics. The Quarterly Journal of Economics, 100(1), 225–251.
Search in Google Scholar Back to article
McCelland, R. and Mok, S. (2012). A review of recent research on labor supply elasticities. Working Papers 43675, Congressional Budget Office.
Search in Google Scholar Back to article
Merz, J. (2002). Time and economic well–being — A panel analysis of desired versus actual working hours. Review of Income and Wealth, 48(3), 317–346.
Search in Google Scholar Back to article
Messenger, J. (2018). Working time and the future of work. ILO future of work research paper series, 6(8), 33–37.
Search in Google Scholar Back to article
Moffitt, R. (1982). The tobit model, hours of work and institutional constraints. Review of Economics and Statistics, 64, 510–15.
Search in Google Scholar Back to article
Oaxaca, R. L. and Renna, F. (2006). The economics of dual job holding: A job portfolio model of labor supply. IZA Discussion paper 4437.
Search in Google Scholar Back to article
Oswald, A. J., Proto, E., and Sgroi, D. (2015). Happiness and productivity. Journal of Labor Economics, 33(4), 789–822.
Search in Google Scholar Back to article
Paxon, C. H., and Sicherman, N. (1996). The dynamics of dual job holding and job mobility. Journal of labor economics, 14(3), 357–393.
Search in Google Scholar Back to article
Pencavel, J. (2015). The productivity of working hours. The Economic Journal, 125(589), 2052–2076.
Search in Google Scholar Back to article
Phaneuf, D., Kling, C., and Herriges, J. (2000). Estimation and welfare calculations in a generalized corner solution model with an application to recreation demand. Review of Economics and Statistics, 82(1), 83–92.
Search in Google Scholar Back to article
Plantenga, J., Remery, C., and Camilleri-Cassar, F. (2009). Flexible working time arrangements and gender equality: A comparative review of 30 European countries.
Search in Google Scholar Back to article
Pouwels, B., Siegers, J., and Vlasblom, J. D. (2008). Income, working hours, and happiness. Economics Letters, 99(1), 72–74.
Search in Google Scholar Back to article
Renna, F. and Oaxaca, R. L. (2006). The economics of dual job holding: A job portfolio model of labor supply. Available at SSRN 877897.
Search in Google Scholar Back to article
Reynolds, J. and Aletraris, L. (2010). Mostly mismatched with a chance of settling: Tracking work hour mismatches in the United States. Work and Occupations, 37(4), 476–511.
Search in Google Scholar Back to article
Shishko, R. and Rostker, B. (1976). The economics of multiple job holding. The American Economic Review, 66(3), 298–308.
Search in Google Scholar Back to article
Song, Y., and Gao, J. (2020). Does telework stress employees out? A study on working at home and subjective well-being for wage/salary workers. Journal of Happiness Studies, 21(7), 2649–2668.
Search in Google Scholar Back to article
Van Soest, A. (1995). Structural models of family labor supply: a discrete choice approach. Journal of human Resources, 63–88.
Search in Google Scholar Back to article
Vuong, Q. H. (1989). Likelihood ratio tests for model selection and non-nested Hypotheses. Econometrica, 57(2), 307–333.
Search in Google Scholar Back to article
White, M., Hill, S., McGovern, P., Mills, C., and Smeaton, D. (2003). High-performance management practices, working hours and work–life balance. British Journal of Industrial Relations, 41(2), 175–195.
Search in Google Scholar Back to article
Wu, Z., Baimbridge, M., and Zhu, Y. (2009). Multiple job holding in the United Kingdom: Evidence from the British Household Panel Survey. Applied Economics, 41, 1–16.
Search in Google Scholar Back to article
Zabel, J. E. (1993). The relationship between hours of work and labor force participation in four models of labor supply behavior. Journal of Labor Economics, 11(2), 387–416.
Search in Google Scholar Back to article

Desired work-leisure balance in a partial equilibrium job search model with multiple job holding

Abstract

Paradigm

My account