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EFFECT OF WAGES ON MULTIPLE JOB HOLDING DECISIONS IN INDONESIA: EVIDENCE FROM THE INDONESIAN FAMILY LIFE SURVEY (IFLS) DATA OF 2007 AND 2014

Niken Dwi Wijayanti

  Faculty of Economics and Business, Universitas Indonesia, Indonesia (nikendwi.wijayanti86gmail.com)

Vid Adrison

  Faculty of Economics and Business, Universitas Indonesia, Indonesia (vadrisonyahoo.com)

ABSTRACT

  Multiple job holding - i.e., a phenomenon in which workers have more than one job-has become a trend in developed countries and is beginning to occur in developing countries, such as Indonesia. Existing studies provide the evidence that wages are a significant and consistent criterion to determine multiple job decisions. Wage increases in the primary job will decrease the incentive to have a second job as the reservation wage increases. However, we do not find any study which links the current multiple job decision with the past multiple job status. In this study, we use data from the Indonesian Family Life Survey (IFLS) in 2007 and 2014 to investigate whether or not a wage increase in the primary job reduces the incentive to have asecond job in 2014, controlling for the multiple job status in 2007. Using logit and multinomial logit estimations, we find that the wage increase in the primary job decreases the probability of having a second job in 2014.

  Keywords: multiple job holding, wages, employment, main job, second job JEL Classification: D31, I31, J22, K31

2 Journal of Indonesian Economy and Business Wijayanti and Adrison INTRODUCTION

1. Background

  The phenomenon of workers who have more than one job is known as multiple job holding (Shishko Rostker, 1976). There are four main models that illustrate the motives that encourage workers to have multiple jobs (Casacuberta Gandelman, 2012; Martinez, Western, Haynes, Tomaszewski, Macarayan, 2014; Wu, Baimbridge, Zhu, 2009; Panos, Pouliakas, Zangelidis, 2014). The first is the hours constrained model, in which workers are unable to increase their working hours to adesired level due to the rigidity of the working hours in the primary job (i.e., the maximum provision for working hours set by the company). Therefore, workers decide to seek asecond job (Bell, Hart, Wright, 1997; Shishko Rostker, 1976; Smith Conway Kimmel, 1998).

  The willingness of the worker to increase hisher working hours is closely related to the low or inadequate income from the main job. Workers will allocate their working time between two different jobs to meet their revenue objectives, assuming that they offer different financial and non financial benefits (Lundborg, 1995). This second model describes a worker doing multiple jobs based on the target income model.

  The third model is the main job insecurity model. The changing times and the high level of competition make people consider having a second job. Workers whose primary jobs are vulnerable to, or at risk of termination will actively participate in multiple job holding to mitigate the possible effects of unemployment (Bell et al., 1997).

  The fourth model that encourages the occurrence of multiple job holding is the heterogeneous job model. In this model, some workers may find an incentive to have more than

  one job because the different jobs are not perfect substitutes. This means that the wages paid and utility lost from forgoing leisure may not adequately reflect the benefits and costs of work (Smith Conway Kimmel, 1998).

  In Indonesia, research into multiple job holding is still a bit in the academic realm. To the best of our knowledge, Martinez et al. (2014) were the first to analyze multiple job holding in Indonesia using the Indonesian Family Life Survey (IFLS) data from 1993, 2000, and 2007. They showed that the proportion of multiple job holders had increased over time, from 20 of the IFLS sample in 1993 to 23 and 24 in 2000 and 2007 respectively. This increase suggests that multiple job holding becomes an important issue for the Indonesian labor market. They conclude that the main motivation for multiple job holding is the constraints faced in the main job, both income constraints, and non- income constraints. An increase in income in the main job reduces the probability of workers having multiple jobs. Although income is increasing over time, the number of multiple job holders are increasing. In our study, the empirical data indicates that more than 40 of people who had multiple jobs in 2007 still had multiple jobs in 2014, suggesting that it takes place permanently.

  Some previous studies provide evidence that multiple job holding is either a permanent or temporary phenomenon of the labor market. A permanent phenomenon is a condition in which multiple job holding takes place continuously over time. Workers with more than one job, because of heterogeneous job motives tend to do so permanently. For example, university lecturers may also work on a consultation project, because both jobs are job-packaged, where the work is complementary (Bell et al., 1997; Kimmel Smith Conway, 2001). On the other hand, a multiple job holding is temporary

  Journal of Indonesian Economy and Business, Vol. 33, No. 1, 2018 3

  if it takes place at a given time, where there are

  job holding decreased when individuals

  constrained hours, increased labor market experienced an increase in income from their uncertainty, and financial shocks. In this case,

  main job, demonstrating consistency with the

  multiple job holding is deemed to be temporary

  target income model. However, the presence of

  to achieve a sub-optimal utility level derived

  high-income individuals who perform multiple

  from one's primary job, or as protection against

  job holding explains that this is not always due

  the risks of unemployment (Casacuberta

  to financial constraints in the main job. In line

  Gandelman, 2012; Kimmel Smith Conway,

  with the findings, Panos et al. (2014) identify

  2001; Panos et al., 2014; Wu et al., 2009). When

  that for low-income groups, multiple job holding

  faced with this, workers will look for opportu-

  is more of a necessity than an option. As for

  nities to overcome these obstacles, one of which

  stable income groups, multiple job holding can

  is by finding a new job. There is some limited

  be used to acquire new skills and develop skills,

  empirical evidence suggesting that constraints in

  explore alternative career paths and pursue the

  their main job play a role in the employee's

  possibility of self-employment activities through

  decision to change the main job or do a side job

  self-employment.

  (Altonji Paxson, 1988; Paxson Sicherman,

  Based on the above description, multiple job

  1996). Thus, if the worker has multiple jobs due

  holding can provide several benefits for the

  to the response to constraints in the main job, it

  worker. One of them is to provide an extra

  will take place temporarily. However, there are

  income which is very useful, especially for

  situations where workers who are constrained in

  emergency purposes (Danzer, 2011). Multiple

  their main job may decide to have side jobs

  jobs can also provide additional satisfaction,

  related to their interests so that there is a

  especially when the second job is related to one's

  possibility of permanence.

  interests (Renna Oaxaca, 2006). They can also

  Research into multiple job holding highlights

  maintain the flexibility of working time (for

  that wages are a significant and consistent

  example, women who have small children can

  criterion. Empirical evidence suggests that do two part-time jobs, one job in the morning increased wages in the main job will increase the

  when the child is in school and the other in the

  minimum wage that drives the individual to have

  afternoon when her husband comes home from

  a second job (reservation wage). Increased

  work and can replace her in taking care of the

  wages in the main job can also reduce the

  child) (Averett, 2001). In addition to any

  number of hours worked in the second job

  financial constraints, recent evidence from

  (Shishko Rostker, 1976). Wu et al. (2009)

  industrialized countries suggests that multiple

  suggest that male workers who are not satisfied

  job holding can also be used to further develop

  with their total earnings from their main job will

  any current skills and acquire new skills, which

  be highly motivated to find second jobs, while

  in turn can lead to better employment oppor-

  higher-wage job opportunities will increase the

  tunities (Panos et al., 2014). This type of labor

  supply of work-hours in the second job for both

  supply behavior can be part of a person's

  men and women. This indicates that the portfolio as a long-term strategy for future career incentive to have multiple jobs is due to

  development. Therefore, it is safe to conclude

  financial pressures and a desire to improve or

  that financial and non financial factors can

  maintain a standard of living. Martinez et al.

  encourage a person to engage in multiple job

  (2014) also found that the tendency for multiple

  holding.

4 Journal of Indonesian Economy and Business Wijayanti and Adrison

  However, in some cases, multiple job holding is also potentially harmful to workers. Second jobs can reduce a person's productivity due to the shifting focus of the worker, due to the heavy workload, including the potential for conflict between the demands of the main job and the second job. Multiple job holding can also mean less time to find more productive job prospects. Furthermore, this type of labor supply behavior can have adverse consequences for one's health and family relationships if it means working more extended hours (Alam, Biswas, Hassan, 2009; ILO, 2004; Panos et al. 2014). Thus, although multiple job holding has the potential to provide more economic opportu- nities and strengthen the workforce, it also allows for increased employment vulnerability to socio-economic uncertainty.

  Due to the losses that may result from multiple job holding, Dickey, Watson, and Zangelidis (2009) identified three main reasons why a person does not have multiple jobs. First, individuals are not interested in multiple job holding. Secondly, they want multiple jobs but cannot find a second job with interesting charac- teristics. Third, the individual wants multiple jobs but does not find a second job. There are two possible reasons why an individual cannot find a second job while another individual can. First, individuals may be less informed about the available job opportunities. Secondly, the

  individual applying for a second job may not meet the criteria desired by the company.

2. Research Problem

  The relatively high number of workers with multiple jobs in Indonesia, either permanently or temporarily has become an interesting topic for research. The IFLS data indicate that 45 of workers who were holding multiple job sin 2007 continued to do so in 2014, indicating a permanent phenomenon (Table 1). Meanwhile, the other 55 do so temporarily. Approximately

  23 of single job holders in 2007 switched to become multiple job holder sin 2014.

  Employment decisions about multiple job holding, either permanently or temporarily, are closely related to wage or income issues in the main job. According to Shishko Rostker (1976), the labor supply becomes more elastic to wage changes if individuals decide to have multiple jobs due to the constrained hours in their main job, where the income they receive from their main job may be insufficient to meet their needs. Changes in wages in the main job will also alter the required reservation wage to make individuals interested in having multiple jobs. If their income from their main job increases, individuals with multiple jobs in the previous period have a lower tendency to have multiple jobs in the next period (i.e., their multiple job holding is temporary). However,

  Table 1. Number of Single Job Holders and Multiple Job Holders in 2014 along with their

  Initial Status in the 2007 Survey

  Year 2014

  Total

Single Job Holder

  Multiple Job Holder

  Year 2007

  Single Job Holder

  Multiple Job Holder

  Source: Author’s computation using data from IFLS 2007 and 2014

  Journal of Indonesian Economy and Business, Vol. 33, No. 1, 2018 5

  there are two possibilities that cause the Kimmel (1998) to analyze the effect of wage tendency for multiple job holding to become

  increases on the multiple job decision. Their

  fixed or even increased (despite an income

  model views individuals as optimizing agents

  increase from the main job). First, the increase in

  with the goal of maximizing utility, or the level

  income is still unable to meet their needs.

  of satisfaction from consuming goods, services,

  Second, the motive for having multiple jobs is

  or leisure, who are confronted with budget and

  not a financial motive.

  time constraints. The available time can be allocated either to time in the labor market or to

  3. Research Objective

  work that generates income and satisfaction, as

  Based on the above description, this research

  well as time at home or leisure resulting in

  will use IFLS data from 2007 and 2014 to

  satisfaction but not income.

  investigate whether or not an income increase in

  Taking into account that the hours offered on

  the primary job affects the multiple job decision

  different jobs may not be the same, the hours

  in 2014, controlling for the multiple job holding

  worked on the main job, h 1 , working hours on

  status in 2007. Estimations are conducted using

  the second jobs, h 2 , and (time spent on) leisure,

  logit estimation. For the robustness check, we

  L, enter into utility functions separately. The

  also perform a multinomial regression, to total utility can be written as follows: account for any possible changes in the job holding status between 2007 and 2014.

  = ( , ℎ , ℎ , ) (1)

  where C is a combination of consumer goods.

4. Benefits of Research

  The consumption value is usually confronted

  By analyzing the effect of a wage increase on

  with budget constraints whose value is equal to

  individuals’ decisions to have multiple jobs, we

  the wage income and non-wage income of

  expect to identify the underlying motives for

  individuals. This can be represented as follows:

  having multiple jobs. For individuals with low incomes, it is widely believed that multiple job

  ℎ+ ℎ + (2)

  holding is more of a necessity than an option. As

  where w i is the average wage received from one

  for more financially stable individuals, multiple

  hour working at job i, so w i h i is the wage income

  job holding can be used as an alternative path for

  from work i, and Y is the non-wage income. The

  developing and enriching their skills, exploring

  wage income from work is confronted with time

  alternative career paths and pursuing the constraints, where the number of hours available possibility of entrepreneurial activities through

  for each worker is limited:

  entrepreneurship. Whether or not such assump- tions are true, become an empirical issue. We

  = ℎ + ℎ + (3)

  argue that the answer will be useful for where T is the time constraint (hours constraint) developing a policy to reduce the negative

  which shows the maximum number of hours in a

  consequences of multiple job holding.

  day,which is 24 hours. Graphically, this can be described by the indifference curve and the

  LITERATURE REVIEW

  budget constraint. The indifference curve is a

  1. Conceptual Framework

  curve that describes the combination of income

  In this section, we present the conceptual

  and leisure that an individual can accept to

  framework developed by Smith Conway and

  maintain their utility to some degree. The budget

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  Wijayanti an d Adrison

  constrain nt describes the combin nation of go oods

  wag ge of w 1 if heshe can n spend h 1 + h 2 hours

  and serv vices that w workers can get from t their

  wor rking at thei ir main job. The I 3 curv ve shows

  income. Note that the slope of the bu dget

  the lowest utilit ty level that the same wo orker can

  constrain nt is the sam e as the inco ome level.

  reac ch if the w worker can o only spend h 1 hours

  Subs stituting the above cons straints into the

  atw work on thei irmain job. This is du ue to the

  utility fu unction for

  C and L, w will result in n the

  stip pulation of th he number o of working h hours set

  followin ng utility-max ximizing pro oblem:

  by t the company y so that wor rkers cannot work for H= =h 1 +h 2 . Th he figure also o shows that t workers

  max x ,

  (ℎ + ℎ+ , ℎ , ℎ , −

  can n still reach a higher utilit ty level than I 3 , which

  ℎ− −ℎ)

  is d denoted by cu urve I 2 , if the e worker is w willing to

  Ther re are two typ pes of multip ple job holdi ings,

  do a a second job b even though h the job off fers lower

  i.e., con nstrained a and non-con nstrained. In na ave rage hourly wages. The e decision to o conduct constrain ned multiple e job holding g, the qualit ty of

  mul ltiple job ho oldings depe ends on wh ether the

  the seco ond job is u usually lower r than the m main

  wag ge-offer in the secon d job exce eeds the

  job. Con nversely, in the uncons trained mult tiple

  rese ervation wag ge. The rese ervation wag ge in the

  job hold ding, the qu uality of the e second jo b is

  seco ond job is sh hown by the lowest utilit ty level I 3

  equal to or better tha an the main j job. We can n use

  whi ich is the intersectio on of the primary

  the utilit ty-maximizin ng problem as written in n (4)

  emp ployment wa age and h 1 working hou w urs. If the to descri ibe both type es of multiple e job holding g. wag ge-offer exc ceeds the re eservation w wage, the

  wor rker will tak ke a second job that res sults in a

  1.1. Con nstrained Mu ultiple Job Ho olding

  grea ater utility.

  Figure 1 1 illustrates the concep pt of the h ours

  For compar rison, Figure e 2 below sh hows the

  constrain ned model. This figur re shows t three

  type e of worker w who chooses s not to have e multiple

  levels of f utility a wo orker can ach hieve, depend ding

  jobs s. This is b because the wage earne ed in the

  on the c conditions of f hisher job b. In this fig gure,

  prim mary job m aximizes the e worker's u utility or

  curve I shows the e highest lev vel of utilit ty a

  bec ause the wa age-offer in the second job does

  worker can achieve e with an a average (hou urly)

  not exceed the r reservation w wage.

  Figu ure 1 Utility M Maximizing De ecision of a C Constrained Mu ultiple Job Ho olding

  Journal o of Indonesian n Economy an nd Business, V Vol. 33, No. 1 , 2018

  Source: Ado opted from Av verett (2001)

  Figure 2 Utility Max ximizing Deci ision of a Con nstrained Non Multiple Job Holding

  Source: A Adopted from m Smith Conw way and Kimm mel (1998)

  In es ssence, if th he worker is s constrained d by

  disu utility of on ne hour work king at a se econd job

  hisher w working hour rs in their ma ain job then h 1 is

  (the e utility of a second job r reduces the u utility lost

  no longe er a choice v variable and the only wa ay to

  from m forgone le eisure). Equa ation (6) is a a general

  increase the working g hours is by having a sec cond

  con ndition betwe een the reser rvation wage e and the

  job. This s is an examp ple of a cons strained mult tiple

  labo or market w wage. The i individual w will offer

  job hold ding in which h workers w will earn a lo ower

  hou urs of work k in the se econd job u until the

  income t than a single e job holder t that has the s same

  mar rginal disutil lity of an add ditional hour r working

  basic qu ualifications ( (and hence th he same ave rage

  in th he second jo ob, divided b by the margin nal utility

  wage of f w 1 ) if he can work f for h 1 +h 2 ho ours.

  of i ncome, equa als the (negat tive) wage pa aid in the

  Based o on the hour rs constrain ned models, the

  seco ond job ((U 2 -U L ))U C =- w 2 ).

  second job is infe erior, in wh hich this w work

  The solution n for the opti imal hours w worked in

  provides s a lower ave erage (hourly y) wage w 2 than

  the second job w will be as fol llows:

  the main n job.

  ℎ=ℎ( ,+( −

  Subs stituting the time constr raint ofthe m main

  job h 1 =

  into the utility-maxi imizing prob blem

  whe ere Y + (w 1 - w 2 )h 1 is the e 'linearized' intercept

  of Equa ation (4), w will produce e the follow wing

  of the new bu udget line se egment. The e letter c

  equation n:

  writ tten above si ignifies this function is a a multiple

  job holding fu function for r workers w max who are x ( + + ℎ+, , , ℎ , − con nstrained by w working hou urs in their m − main job. −ℎ)

  and ge enerate the e following g optimiza ation

  1.2. . Non Constr rained Multip ple Job Hold ding

  relations ships:

  Figu ure 3 below illustrates t the concept o of a non-

  ( − )⁄ = =−

  hou urs constrain ned multiple e job holdin g, where ther re is no hou ur constraint on the main n job, so

  where U U 2 is the par rtial derivativ ve of the ut tility

  wor rkers can wo ork longer ho ours at that jo ob if they

  with res spect to h 2 . Then, U 2 -U U L is a marg ginal

  wis h. Taking a a second job b will be do ne if the

  8 Jou urnal of Indon nesian Econo omy and Busin ness

  Wijayanti an d Adrison

  wage pa aid for hat second job b can yield the

  hete erogenous ch haracteristic s of the wo ork, there

  worker a autility of at least I 1 . In c ontrast to Fig gure

  may y be other re easons that e encourage in ndividuals

  1, this t type of wor rker has an hourly ave rage

  to d do both jobs . Thus, we c can observe the work

  wage of f w 2 offered d by thesec ond job, w hich

  hou ur offer eq quation for both jobs as the

  should b be higher tha an the averag ge (hourly) w wage

  foll lowing:

  in the m main job (w w 1 ). Thus, th he multiple job

  ℎ= ℎ( , , ), for r i = 1, 2

  holder w will earn mor re relative in ncome comp ared to a sing gle job holde er. This may y occur when n the

  Wh here ℎ de enotes the unconstraine ed labor

  quality o of the second d job exceed ds the qualit ty of

  sup ply function n. Comparat tive statics for such

  the main n job (in this s case, in its s income-rel lated

  mod dels, based o on standard a assumptions about the

  dimensio ons).

  util ity function ns, show th hat ℎ

  0 for , with an ambiguous sign when = . The assu umption that t leisure is a a normal goo od shows

  ℎ 0.

  1.3. . Multiple J Job Holdin ng Permane ently or

  Temporari ly The e permanent t or tempor rary phenom menon of

  mul ltiple job ho olding can be e explained i in Figure

  4 be elow. This im mage is a fu urther develo opment of the blend of Fig gures 1 and 2 of the co nstrained mul ltiple job hol lding types.

  In the figur re above, cur rve I shows the level

  of u utility of a w worker when multiple job b holding

  Figure 3 Utility Max ximizing Dec cision of a N Non-

  occ urs due to t the working hours const traints in

  Constrained d Multiple Job Holding

  the primary job b. This type of worker can only

  Source: Adopt S ted from Aver rett (2001)

  spen nd h 1 hours atwork at th heir primary job with

  The utility-maxim mization pro oblem writte en in

  an average (hou urly) wage of w 1 so tha at hisher

  Equation n (4), produc ces the optim mization relat tion-

  inco ome is insu fficient to m meet their n needs. To

  ship as f follows:

  mee et their need ds, workers are willing to do a seco ond job for up to h 2 ho ours even th hough the

  ( − − )⁄ = − , untuk i = 1, 2

  wor rk offers a l ower averag ge (hourly) w wage rate

  Equa ation (8) exp plains that th e individual will

  w 2 . Curve I' sh hows the ut tility when t the wage

  offer ho ours of wo ork to each h job until the

  paid d for the m main job incr rease from w w 1 to w 1 '

  marginal l disutility o of one hour r worked on n the

  (Δ1 w 1 ), allowin ng workers to o get out of f multiple

  job (the utility of t the work is reduced by y the

  job holding if t the wage in ncreasecan m meet their

  utility lo ost from forg gone leisure) ) divided by

  nee ds. However r, since the i increase in w wages has

  marginal l utility of in ncome, equa als the (negat tive)

  not been able t to meet hish herneeds, th e worker

  wages p paid on the j ob. In fact, individuals who

  mus st keep doin ng multiple j jobs (i.e., p ermanent

  want to work with m more work ho ours will alw ways

  mul lti job hold ding). Howe ever, an inc crease in

  choose t to work in a second job d due to the hig gher

  wag ges at their m main job allo ows workers to spend

  wages. H However, du ue to the po ossibility of f the

  less s time doing g second job bs (h 2 '). The curve I''

  Journal o of Indonesian n Economy an nd Business, V Vol. 33, No. 1 , 2018

  Figure 4 Uti ility Maximiz zing Decision of a Permanen nt and Tempo orary Multiple Job Holding Source: Autho S or

  shows th he highest u utility that c can be achie eved

  who o perform multiple jo ob holding. Friesen

  when the e wage in the e main job in ncrease from mw 1 '

  01) used the e data from the Canadia an Labor

  to w 1 '' (Δ Δ1w 2 ). The I I'' curve can a also be achie eved

  Sur rvey in June 1997. Estim mates were c onducted

  by the i increase inth he main job’ ’s wage dire ectly

  by looking at how variati ions in the working

  from w 1 to w 1 '' (Δ1w w 3 ). This wa age increase can

  hou urs and wag es affect mu ultiple job d decisions.

  meet the e needs of w workers, allow wing worker rs to

  The e empirical studies re elated to th he target

  quit thei ir multiple j job holding. . This condi ition

  inco ome model by Krishna an (1990) s show the

  enables workers to revert back to a single job

  evid dence of a relationship p between e employee

  (i.e., the multiple job b holding is t temporary).

  inco ome and th he tendency y for mult tiple job hold ding. Using g the Surv vey of Inco ome and

  2. Previo ous Empiric cal Studies

  Pro gram Partici ipation (SIPP P, wave 2) d data from

  Based o n the above theoretical explanation, , the

  Feb bruary-April 1984, the re search concl ludes that

  four mo otives under rlying the workers hav ving

  the tendency to o have multip ple jobs dec creases as

  multiple jobs as de escribed in t the introduc ctory

  income rece eived from th he main job i increases.

  section c can be group ped as follow ws:

  Nev vertheless, t the Robinso on and W Wadsworth (20

  07) study u using Labor r Force Surv vey data

  1. A co onstrained m multiple job holding if f the

  from m 1998-2003 3 failed to fi find evidence e that the

  under rlying motiv ve is the h hours constr raint

  intr roduction of minimum w wages in the U UK had a

  mode el, target inc come model l, and main job

  sign nificant effe ect on empl oyment dec isions in

  insec urity model.

  mul ltiple job ho olding. How wever, the m main job’s

  2. An u unconstrained d multiple jo ob holding if f the

  hou urs will inc crease for m multiple job b holders

  under rlying motiv ve is the het erogeneous j jobs

  who ose main job bs are not c covered by m minimum

  mode el.

  wag ges, and the e second jo ob’s hours w will drop

  In th his regard, F riesen (2001 1) found that t the

  whe en wages in n the second d job are b elow the

  constrain ned hours mo odel caused by overtime pay

  min nimum wage .

  regulatio ons will incr rease the num mber of wor rkers

10 Journal of Indonesian Economy and Business Wijayanti and Adrison

  Böheim and Taylor (2004) found that the

  variable is positive and significant, suggesting

  existence of a permanent employment contract

  that multiple job holding takes place permanen-

  in the main job - as a proxy for job security - can

  tly. Furthermore, they argue that multiple job

  reduce the tendency to seek second jobs. The

  holding caused by financial shock is difficult to

  study was conducted using the British House-

  classify as a temporary phenomenon. This is

  hold Panel Survey (BHPS) data from 1990-1991.

  because workers who do it permanently are low-

  Danzer (2011) also showed empirical results for

  paid workers who are usually trapped in the

  the main job insecurity model using Ukrainian

  "low-payno pay" cycle.

  Longitudinal Monitoring Survey (ULMS) data from 2003 and 2004. This study concluded that

  3. Research Hypotheses

  having a second economic activity can be used

  Based on the theoretical model above, our

  as a coping strategy for smoothing income and

  research hypotheses are as follows:

  ensuring no work disruption during wage shocks

  1. The greater the increase is in income from the

  in the main job. Furthermore, Renna and Oaxaca

  main job, this will lower the probability of an

  (2006) using the Current Population Survey

  individual having multiple jobs in the next

  (CPS) data from May 1991 found evidence of

  period

  the heterogeneous model’s motive. They found

  2. The greater the increase is in income from the

  that some workers have personal preferences for

  main job, this will lower the probability of

  job differentiation, where they derive different

  individuals permanently having multiple jobs,

  utility levels from their main job and their

  and increase the probability of individuals

  second job.

  only having multiple jobs temporarily.

  An empirical study regarding whether or not multiple job holding is permanent or temporary

METHOD, DATA, AND ANALYSIS

  was conducted by Panos et al. (2014). In that research, Panos et al. (2014) used the British

  1. The Empirical Model

  Household Panel Survey (BHPS) data from

  Based on the theoretical model discussed in the

  1991-2005 and included a variable to reflect the

  previous section, the worker will have different

  initial status of multiple job holding in supply functions of multiple job holding based estimating the employment decisions about on the underlying motives. In general, the multiple job holding for the next few periods.

  number of working hours desired on a second

  They conclude that the coefficient of this job is distributed as follows (Equation 10).

  ℎ(, , )if ℎ ≤ ℎ , ℎ ℎ ≤ ℎ

  where

  ℎ : The number of work hours offered by the worker ℎ : Number of hours requested by a company ℎ : The number of work hours offered by the worker in the main job ℎ : The number of work hours requested by the company in the main job

  Journal of Indonesian Economy and Business, Vol. 33, No. 1, 2018 11

  Smith Conway and Kimmel (1998) use

  effect of a change in income in the primary job

  Equation (10) to estimate the behavior of between workers with a single job and those multiple job holding using both a discrete and

  with multiple jobs.

  continuous dependent variable. They estimate

  To account for other contributing factors, we

  the decision to have multiple jobs for all workers

  use the following set of control variables. First,

  using a discrete dependent variable. The the worker's characteristics which consists of the continuous variable was used to estimate the

  monthly income from the primary job (as a

  number of working hours in the second job for

  natural logarithm), a gender dummy (one for

  the multiple job holders only. From the working

  male worker, zero otherwise), age (in years),

  hours (in the second job) equation, it can be

  quadratic age, a dummy for primary education

  drawn that the probability is h2≥0. If h2> 0 then

  (one if the highest level of education is primary

  the worker will have multiple jobs, but if h2=0

  education, zero otherwise), a dummy for higher

  then the worker does not have a second job.

  education (one ifthe worker has at least a college

  In this study, the focus is on the employee's

  education, zero otherwise), and a marital status

  decision to have multiple jobs, so that we use a

  dummy (one if married, zero otherwise). Second,

  discrete dependent variable. We use a logistic

  family characteristics which consist of the

  regression to determine whether or not a worker

  number of household members aged 15-64 who

  will have more than one job using the following

  worked during the last twelve months (person),

  general function:

  and the average of the other household member's

  ( = 1| ) = ( monthly (nominal) income, and the hours spent ) (11)

  at their primary job per month (in hours).

  with F (.) being a logistic function, X i is the

  We use a location dummy (one if urban, zero

  vector of factors affecting the decision of the

  otherwise), a dummy for the first job employ-

  worker to perform multiple job holding, and β is

  ment status (one if an employee, zero otherwise)

  the parameter vector.

  and a job sector dummy (one if in agriculture,

  Our sample consists of workers aged 15-65

  zero otherwise) as additional control variables.

  years in the IFLS 2014 who were also available

  As Monk and Hodge (1995) argue, the labor

  for IFLS 2007 and have a similar educational

  market’s structure is different from urban

  attainment in the two surveys. The dependent

  structures concerning its wage rates, transpor-

  variable equals one if the workers have multiple

  tation systems, and the trend with jobs is toward

  jobs, and zero otherwise.

  part-time. Generally, rural areas have narrow

  Our variable of interests consists of three

  industrial bases, smaller numbers of entre-

  variables. First, the change in monthly income

  preneurs and the type of work is self-employed

  from the main job between 2007 and 2014 (in

  (Hodge, Dunn, Monk, Fitzgerald, 2002).

  the nominal term). Second, a dummy variable to

  Rural and urban differences in the labor market’s

  reflect the multiple job holding status in 2007

  structure are also reflected in the different job

  (one if the worker had multiple jobs in 2007,

  opportunities and job options available, as well

  zero otherwise). Third, the interaction of both

  as the dissemination of job-related information.

  variables (the income change from the main job

  In some cases, multiple job holding among

  multiplied by the initial multiple job status) on

  agricultural households in rural areas arose as a

  the primary job (nominal term, as a natural

  result of the variability in agricultural incomes

  logarithm). The interaction variable reflects the

12 Journal of Indonesian Economy and Business Wijayanti and Adrison

  (Mather Scopilliti, 2004; Taylor Little,

  consumption, health, education, employment,

  assets, migration, and others. Five waves of this

  To estimate the transition probability of

  survey have been conducted, i.e., in 1993, 1997,

  multiple job status between 2007 and 2014, we

  2000, 2007, and 2014. In the first survey (1993)

  conduct a Multinomial Logit (MNL) regression

  the samples covered 13 provinces, namely North

  using the following general function:

  Sumatra, West Sumatra, South Sumatra, Lampung, DKI Jakarta, West Java, Central Java,

  the Special Region of Yogyakarta, East Java,

  where F (.) is a multinomial logistic function, X t,

  Bali, West Nusa Tenggara, South Kalimantan,

  i is the vector of the factors affecting the decision

  and South Sulawesi. Although it only included

  of the worker to transition from state j at t-1 to

  these13 provinces in Indonesia, the IFLS results

  state k at time t (permanent or temporary

  adequately illustrate 83 of the population of

  multiple job holding), and β is the parameter

  Indonesia (Strauss, Witoelar, Sikoki, 2016). In

  vector.

  this study, we used the data from the two most recent IFLS, namely, the IFLS conducted in

  As there are two statuses (multiple job

  2007 and 2014.

  holder and single job holder) in each dataset, we have four job status categories as described in

  IFLS data can be used to analyze the proba-

  Table 2.

  bility of a worker doing multiple jobs, as the following questions (in the employment section

  The independent variables used in this model

  of Book 3A) show:

  are the same as in the first model, except the initial status variables and the interaction

  1. Did you worktry to workhelp to earn

  variables (i.e., the income change from the main

  income for pay for at least 1 hour during the

  job multiplied by the initial multiple job status)

  past week?

  are not included in the estimation model because

  2. Did you have an additional job other than

  they are self-reflected by the decision variables.

  your main job?

  3. Which category best describes your main

2. Data

  job? Your second job? (Employment status) -

  This study uses IFLS data which is a national

  (self-employed, self-employed with unpaid

  panel survey conducted by the Research and

  family workertemporary worker, self-

  Development (RAND) Corporation. IFLS is a

  employed with permanent worker, govern-

  comprehensive survey of many aspects Indone-

  ment worker, private worker, casual worker

  sian domestic life, that collects data on income,

  in agriculture, casual worker not in agricul-

  Table 2 Matrix Transition between t-1 and t

  t (year 2014) Single Job

  Multiple Job

  Holder (S)

  Holder (M)

  Single Job

  P (y t =S| y t-1 =S) P (y t =M| y t-1 =S)

  t-1

  Holder (S)

  (year 2007)

  Multiple Job

  P (y t =S| y t-1 =M) P (y t =M| y t-1 Holder (M) =M)

  Source: Author’s classification

  Journal of Indonesian Economy and Business, Vol. 33, No. 1, 2018 13

  ture, unpaid family worker)

  people (77.33) and the multiple job holders

  4. What type of occupation do you have for

  5,046 people (22.67). From the 2014 survey,

  your main job? For your second job?

  the single job holders amounted to 21,350 people (75.99) and the multiple job holders

  5. What is the total number of hours worked

  totaled 6,744 people (24.01).

  during the past week at your main job? At your second job?

  When estimating the logit and multinomial logit models, the main observations were limited

  6. Approximately, including all benefits, how

  to the same individuals in the two surveys from

  much do you earn from your main job? From

  2007 and 2014, and had similar educational

  your second job?

  attainments in both surveys. The final sample

  Information on the other socio-demographic

  after cleaning the data amounted to 14,594

  characteristics of each respondent, such as the

  people, which comprised the single job and

  number of household members employed, the

  multiple job workers in 2014 along with their

  amount of income of other household members,

  initial status, whether single or multiple job

  educational background, and others is compiled

  holders in the previous survey in 2007. This is

  with the employment module. From the

  summarized in Table 1.

  combined dataset, we have 24,175 and 31,539 individuals from 2007 and 2014 respectively. In

  3. Descriptive Analysis Results

  the process of selecting observation samples, as

  The descriptive statistic of the individual charac-

  shown in Table 3, the working population in

  teristics of workers, the family characteristics of

  2007 was 22,829 people, while in 2014 it was

  the individual workers, the environmental

  29,004 people. The total number of workers

  characteristics, and the characteristics of the

  aged 15-65 years old was 22,346 people in 2007

  labor market can be seen in Table 4 to Table 10.

  and 28,294 people in 2014. The next sample

  Table 4 presents a descriptive statistic of the

  selection process is to select workers with a

  observations of the same working individuals

  maximum number of 672 working hours per

  from the two surveys in 2007 and 2014 and who

  month (24 hours x 7 days x 4 weeks). This

  havesimilar educational attainments in both

  results in a sample consisting of 22,260 people

  surveys. Table 5 to Table 10 show theadditional

  in 2007 and 28,094 people in 2014. From the

  descriptive statistics.

  2007 data, the single job holders number17,214

  Table 3. Sample Selection of IFLS Data in 2007 and 2014

  Year 2007

  Year 2014

  Total Observations of IFLS Data:

  No. Drop Observation if:

  1. Does Not Work

  2. Age <15 Years and> 65 Years

  3. Working Hours> 672 Hours

  Total Deleted Observations:

  Total Sample Selected for Study:

  Total Single Job Holder:

  Total Multiple Job Holder:

  Source: Author’s computation using data from IFLS 2007 and 2014

14 Journal of Indonesian Economy and Business Wijayanti and Adrison

  Table 4 Descriptive Statistics Characteristics of Individual Workers, Family Characteristics of

  Individuals Worker, Environmental Characteristics, and Characteristics of the Labor Market

  Variable Mean Std. Dev. Min. Max

  Multiple Job Holding

  Initial Status MJH

  ∆Income Main Job

  Interaction 201,414.6 4,969.450 -11,923.8 2,980.958 Ln(Income Main Job in 2007)

  Dummy Gender (1=Male)

  Age Square

  Dummy Basic Education (1=Elementary School)

  Dummy High Education (1=University)

  Dummy Marital Status (1=Married)

  Number of Household Member Working

  Total Income other Household Member

  Hours Work on Main Job (per month)

  Dummy Main Job Sector (1=Agriculture)

  Dummy Main Job Status (1=Paid Employee)

  Dummy Location (1=Urban)

  Ln(Income Increase Main Job)

  Ln(Increase Interaction)

  Ln(Income Decrease Main Job)

  Ln(Decrease Interaction)

  Observation 14,594 Source: Author’s computation using data from IFLS 2007 and 2014

  From Table 4, 28.4 of the total workers in

  average age of multiple job holders in 2014 is 40

  2014 decided to conduct multiple job holding.

  years old, and the average working hours per

  Approximately 25.1 of our sample have month is 165 hours or 5-6 hours per day. multiple jobs in 2007. The average of the main

  We can see that the overall number of male

  job income per month between 2007 and 2014 is

  workers is almost twice of female workers

  Rp1,297,339 with a maximum value of (Table 5). The share of multiple job holders Rp8,103,084 and a minimum value of among the male workers is almost three time of Rp11,923.8. This indicates that there are workers

  the share of multiple job holders among the

  who experienced an increase in their income, as

  female workers (14.46 vs. 5.55). In contrast,

  well as some who suffered a decrease, from their

  female workers are more likely to have

  main work between the two survey periods. Out

  permanent single job rather than male workers

  of 14,594 individuals there are 10,648 indivi-

  (67.9 vs. 52.4). From Table 6, it can be seen

  duals who experienced an increase in their

  that workers with a secondary education is 50

  income, 2,587 people experienced a decreased

  of our sample. Workers who remain a single job

  income, and the remaining 1,359 people had a

  holder is greater than 50 of samples for each

  fixed income. The average increase in the main

  education level. Based on education level, the

  job income was 13.7, while the average

  share of permanent multiple job holders from

  decline for those who suffered a decreased

  samples with primary education is higher than

  income from the main job was 12.8. The

  Journal of Indonesian Economy and Business, Vol. 33, No. 1, 2018 15

  two other groups (14 vs. 9.2 and 9.9). From

  the share of workers who remain as single job

  Table 7, we can see that the share of permanent

  holder in the married workers is less than those

  multiple job holders in married workers is twice

  of single workers.

  of single workers (12 vs. 6). On the contrary,

  Table 5. Sample Profiles of Single and Multiple Job Holdersin 2014 with Status in the 2007 Survey

  Period Based on Gender

  Number of Single-

  Number of

  Number of

  Number of Single-

  Gender

  Multiple Job

  Multiple-Single Job Multiple-Multiple

  Total

  Single Job Holder

  Holder

  Holder

  Job Holder

  Source: Author’s computation using data from IFLS 2007 and 2014

  Table 6. Sample Profiles of Single and Multiple Job Holders in 2014 with Status in the 2007 Survey

  Period Based on the Highest Education everbeing Attended

  Number of

  Number of

  Number of

  Number of

  Type of Education

  Single-Single Single-Multiple Multiple-Single Multiple-Multiple

  Total

  Job Holder

  Job Holder

  Job Holder

  Job Holder

  Basic Education

  Secondary Education

  High Education

  Source: Author’s computation using data from IFLS 2007 and 2014

  Table 7. Sample Profiles of Single and Multiple Job Holders in 2014 with Status in the 2007 Survey

  Based on Marital Status

  Number of

  Number of

  Number of

  Number of

  Marital Status Single-Single

  Single-Multiple Multiple-Single

  Multiple-Multiple

  Total

  Job Holder

  Job Holder

  Job Holder

  Job Holder

  Not Married

  Source: Author’s computation using data from IFLS 2007 and 2014

16 Journal of Indonesian Economy and Business Wijayanti and Adrison

  From Table 8, it can be seen that self-

  workers who remain a single job holder is higher

  employed workers have a higher share of having

  than self-employed workers. From Table 9, the

  a permanent multiple job compare paid workers

  share of permanent multiple job holders in

  and unpaid family workers (14 vs. 9 and 7

  agriculture is almost twice those in other sector

  respectively). The same pattern can also be seen

  (17 vs. 9). The share of permanent multiple

  for those who switched from single job holders

  job holders in rural is 16.7, which is almost the

  to multiple job holders (19 vs. 15 and 12).

  same to the share of permanent job holders in

  The share of paid workers and unpaid family

  agriculture sector (Table 10).

  Table 8 Sample Profiles of Single and Multiple Job Holder Workers in 2014 and their Status in the

  2007 Survey Period Based on Main Employment Status

  Number of

  Number of

  Number of

  Number of

  Main Job Status

  Single-Single

  Single-Multiple Multiple-Single Multiple-Multiple

  Total

  Job Holder

  Job Holder

  Job Holder

  Job Holder

  Self Employed

  Paid Worker

  Unpaid Family

  Source: Author’s computation using data from IFLS 2007 and 2014 Table 9 Sample Profiles of Single and Multiple Job Holder Workers in 2014 and their Status in the

  2007 Survey Period Based on Main Job Sector

  Number of

  Number of

  Number of

  Number of

  Main Job

  Sector

  Single-Single Single-Multiple Multiple-Single Multiple-Multiple

  Total

  Job Holder

  Job Holder

  Job Holder

  Job Holder

  Agriculture Sector

  Non Agriculture

  Source: Author’s computation using data from IFLS 2007 and 2014 Table 10. Sample Profiles of Single and Multiple Job Holder Workers in 2014 and their Status in the

  2007 Survey Period Based on Residence

  Number of

  Number of

  Number of

  Number of

  Multiple-Single Multiple-Multiple

  Total

  Job Holder

  Job Holder

  Job Holder

  Job Holder

  Source: Author’s computation using data from IFLS 2007 and 2014

  Journal of Indonesian Economy and Business, Vol. 33, No. 1, 2018 17

  4. Estimated Results

  The estimation results of the wage effect on

  4.1 Logit Estimation Results of Multiple Job

  employees’ decisions to perform multiple job

  Holding Decision

  holding based on their initial status of MJH for workers aged 15-65 years using a logit regression can be seen in Table 11 below.

  Table 11. Logit Estimation Results of Multiple Job Holding Decision

  Model Logit (1=Multiple Job Holding) Model 1

  Sample with Sample with

  Full

  Sample with

  Sample with

  ∆Income Main Job

  Initial MJH Status

  Ln(Income Increase

  from the Main Job)

  Ln(Income Increase) x

  Initial MJH Status

  Ln(Income Decrease

  from the Main Job)

  Ln(Income Decrease) x

  Initial MJH Status

  Ln(Income from the

  -0.01382 -0.00741 -0.02385 -0.01404

  -0.01015 -0.16403

  Main Job in 2007)

  Dummy Gender

  (0.003) (0.004) (0.010) (0.003) (0.003) (0.038) Age Square

  Dummy Basic Education

  -0.01882 -0.02572 -0.03322 -0.01885

  Dummy High Education

  Dummy Marital Status

  Number of Household

  Members Working

  Total Income Other

  -0.00004 -0.00003 -0.00015 -0.00004 -0.00002 -0.00019

  Household Members

  Hours Worked in

  -0.00042 -0.00044 -0.00039 -0.00043

  -0.00035 -0.00171

  the Main Job (month)

  Dummy Main Job

18 Journal of Indonesian Economy and Business Wijayanti and Adrison

  Model Logit (1=Multiple Job Holding) Model 1

  Sample with Sample with

  Full

  Sample with

  Sample with

  (1=Agriculture) Dummy Main Job

  -0.05689 -0.06950 -0.01528 -0.05693

  (1=Paid Worker) Dummy Location

  -0.02852 -0.03115 -0.21222 -0.02881

  N 11,714 8,787 2,587 11,714 8,787 2,587 Source: Author’s computation using data from IFLS 2007 and 2014

  p<0.01, p<0.05, p<0.1 The number in brackets () indicates the standard error

  Based on the above table, using the full

  holding is positive and statistically significant.

  sample, those who have multiple jobs in 2007

  This implies that for workers who had multiple

  have a higher probability to have multiple jobs

  job in 2007, the higher the percentage decrease

  in 2014. This indicates that multiple job holding

  in their income from their primary job, the

  takes place permanently. However, we do not

  higher is the probability to remain as a multiple

  find a significant impact of the change in the

  job holders in 2014, indicating permanent

  income from the main job on the probability of

  phenomenon.Those who have higher income

  having multiple jobs in 2014. This is probably

  (from the primary job) in 2007 is less likely to

  because there are workers who experienced an

  have multiple job in 2014 in five out of six

  increase in their income while some others

  specifications.

  experienced a decrease in their income, which

  With regard to gender, we found that male

  may result in insignificant parameter. We then

  workers have a higher probability to have

  split the sample for those who experienced an

  multiple jobs in 2014. Based on workers’ age,

  increase in their income and those who the probability of having multiple jobs in 2014 experience a decrease in their income. As the

  follows an inverted U-shaped curve, indicated by

  result, we have 8,787 observations from those

  a positive parameter of variable age and negative

  with income increase and 2,587 observations

  parameter of variable age-squared. For education

  from those with income decrease.

  variables, we found interesting results.

  After splitting the sample, we found that the

  Specifically, workers with basic education have

  higher the percentage of income increase, the

  a lower probability to have multiple jobs in

  lower is the probability to have multiple jobs in

  2014, while those with university education have

  2014. For workers who experienced a decrease

  a higher probability to have multiple jobs. We

  in income from their primary job, we found that

  argue that – other things being constant -

  the higher the income decrease, the higher is the