Multiple Job Holding, Local Labor Markets, and the Business Cycle

Barry T Hirsch,John V Winters,Muhammad Husain

doi:10.2139/ssrn.2716571

Abstract

About 5 percent of U.S. workers hold multiple jobs, which can exacerbate or mitigate employment changes over the business cycle. Theory is ambiguous and prior literature is not fully conclusive. We examine the relationship between multiple job holding and local unemployment rates using a large Current Population Survey data set of workers in urban labor markets during 1998-2013. High unemployment labor markets have moderately lower rates of multiple job holding. Yet no relationship between multiple job holding and unemployment is found within markets over time, with near zero estimates being precisely estimated. The response of multiple job holding to unemployment is acyclic.

Highlights

5 % of US workers hold multiple jobs
In contrast to prior literature on multiple job holding and the business cycle, our analysis focuses on how local area multiple job holding varies with respect to local labor market business conditions
We provide supplementary analysis using Current Population Survey (CPS) panels of worker-year pairs for the years 1998/1999 through 2012/2013.12 The panels provide a robustness check on our principal cross section results, examining how 1year changes in the unemployment rate within labor markets affect workerspecific transitions into and out of multiple jobs

Summary

Introduction

5 % of US workers hold multiple jobs. The common perception among journalists and the public is that multiple job holding is countercyclical, used by workers to help offset household income losses during a recession. Neither theory nor prior evidence, provides an unambiguous answer to the question of whether multiple job holding is procyclical or countercyclical. Based on labor supply theory, workers’ willingness to hold multiple jobs may be countercyclical if household income effects are strong. Even if labor supply for multiple jobs is countercyclical, product and labor demand falls in a recession, resulting in fewer opportunities to hold multiple jobs absent extreme wage flexibility. The limited evidence that exists on multiple job holding and the business cycle is suggestive, but not fully conclusive

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Conclusion