Using French employer-employee matched data, we examine how wage inequality within organizations influences employees' decisions to engage in moonlighting (getting side jobs). We find that horizontal wage dispersion has a significant positive effect on moonlighting behavior (ß = 0.2586), suggesting that employees respond to peer wage inequality by taking second jobs. However, this relationship is moderated by various organizational signals of opportunity: vertical wage dispersion (ß = -0.8782), permanent contracts, overtime availability, and profit-sharing arrangements all significantly reduce the likelihood that employees will moonlight in response to horizontal wage dispersion. Furthermore, we find that these effects vary across socio-professional categories, with highly educated workers showing greater sensitivity to peer wage differences compared to manual workers. Our study contributes to the strategic human capital literature by identifying moonlighting as a form of partial human capital loss, demonstrating how perceptions of opportunity moderate responses to wage inequality, and revealing how different types of workers respond to horizontal pay differences. These findings suggest that managers can mitigate human capital loss through moonlighting by carefully designing compensation structures and advancement opportunities.
