This paper develops a unified model of dual and unitary job holding based
on a Stone-Geary utility function. The model incorporates both constrained and
unconstrained labor supply. Panel data methods are adapted to accommodate unobserved
heterogeneity and multinomial selection into six mutually exclusive labor
supply regimes. We estimate the wage and income elasticities arising from selection
and unobserved heterogeneity as well as from the Stone-Geary Slutsky equations.
The labor supply model is estimated with data from the British Household Panel
Survey 1991–2008. Among dual job holders, our study finds that the Stone-Geary
income and wage elasticities are much larger for labor supply to the second job compared
with the main job. When the effects of selection and unobserved heterogeneity
are taken account of, the magnitudes of these elasticities on the second job tend to be
significantly reduced

• Constrained vs unconstrained labor supply: the economics of dual job holding