Moonlighting is increasingly popular in OECD countries, with 5 to 10 percent of workers holding two or more jobs. However, little is known about the responsiveness of moonlighting to financial incentives due to the lack of identifying variation. This paper studies a unique reform in Germany that allowed workers to hold small secondary jobs tax-free, decreasing the marginal tax rate by between 19.5 to 66 pp. I show that the reform resulted in a dramatic increase in moonlighting that was not offset by reductions in primary earnings and that hours constraints are a key determinant of moonlighting.
"Increasing Hours Worked: Moonlighting Responses to a Large Tax Reform."
American Economic Journal: Economic Policy,
Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
Fiscal Policies and Behavior of Economic Agents: Household
Time Allocation and Labor Supply
Wage Level and Structure; Wage Differentials