Leisure, aspirations, and multiple job holding

Workers value leisure, but they are often forced to hold multiple jobs to raise income. This paper develops a prospect-theory model in which individuals jointly choose leisure and allocate time between a safe job (e.g., low-skill service) and a risky occupation (e.g., self-employment). Outcomes are evaluated relative to an income reference point, with losses weighted more heavily than comparable gains. The model yields a nonmonotonic relationship between income aspirations and leisure: as aspirations rise, leisure first declines and then increases once aspirations are sufficiently high. At high aspiration levels, a higher safe wage (e.g., minimum-wage increase) shifts time toward safe employment and away from both leisure and risky activity. At low aspiration levels, the effect on work–leisure allocation is ambiguous. From a policy perspective, income-protection measures alter employment choices across aspiration levels, particularly when workers cannot self-insure through safe employment.