Increasing Hours Worked: Moonlighting Responses to a Large Tax Reform
Moonlighting is increasingly popular in OECD countries, with 5 to 10% 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 66pp. 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 is the key determinant of moonlighting.
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Copy CitationAlisa Tazhitdinova, "Increasing Hours Worked: Moonlighting Responses to a Large Tax Reform," NBER Working Paper 27726 (2020), https://doi.org/10.3386/w27726.
Published Versions
Alisa Tazhitdinova, 2022. "Increasing Hours Worked: Moonlighting Responses to a Large Tax Reform," American Economic Journal: Economic Policy, vol 14(1), pages 473-500. citation courtesy of 
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