Secondary job holding in Germany

• Published in: Applied economics 2020-06, Vol.52 (30), p.3238-3256
• Main Authors: Klinger, Sabine, Weber, Enzo
• Format: Article
• Language: English
• Subjects: Earnings; Economic analysis; Economic theory; Exemption; Incentives; Labor market; low pay segment; macroeconomic development; Migrants; multinomial logit model; Secondary job holding; Social security; Taxation; Time series; Workers
• ISSN: 0003-6846; 1466-4283
• DOI: 10.1080/00036846.2019.1707767

Since 2003, the number and ratio of multiple jobholders has more than doubled, although the German labour market has been experiencing a strong and sustained upswing. This study analyses multiple jobholding from a time series as well as a cross section perspective. We use rich register data and multinomial logit estimations. The microeconometric findings are linked to macroeconomic trends. Workers hold multiple jobs primarily because of earnings´ or hours´ constraints in the main job. Towards the upper end of the earnings distribution, the probability to have another job does not rise again. Thus, we do not find evidence that another job shall enrich the job portfolio as such. Moreover, female workers, migrants, workers in West Germany as well as in service sectors have a higher than average probability of multiple jobholding. However, the individual factors explain the rise of multiple jobholding over time to a very small extent. Hence, we argue that the far-reaching exemption of second marginal jobs from social security contributions and taxes sets wrong incentives.