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Employment Adjustment and Part-Time Work: Lessons from the United States and the United Kingdom

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  • Daniel Borowczyk-Martins
  • Etienne Lalé

Abstract

We document that fluctuations in part-time employment play a major role in movements in hours per worker during cyclical swings in the labor market. Building on this result, we develop a stock-flow framework to describe the dynamics of part-time employment. The evolution of part-time employment is predominantly explained by cyclical changes in transitions between full-time and part-time employment. Those transitions occur overwhelmingly at the same employer, entail sizable changes in individual working hours and are associated with an increase in involuntary part-time work. Our findings provide a novel understanding of the cyclical dynamics of labor adjustment on the intensive margin.

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  • Daniel Borowczyk-Martins & Etienne Lalé, 2019. "Employment Adjustment and Part-Time Work: Lessons from the United States and the United Kingdom," American Economic Journal: Macroeconomics, American Economic Association, vol. 11(1), pages 389-435, January.
  • Handle: RePEc:aea:aejmac:v:11:y:2019:i:1:p:389-435
    Note: DOI: 10.1257/mac.20160078
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    Cited by:

    1. Olena Kostyshyna & Etienne Lalé, 2019. "On the Evolution of Multiple Jobholding in Canada," Staff Working Papers 19-49, Bank of Canada.
    2. Borowczyk-Martins, Daniel & Lalé, Etienne, 2020. "The ins and outs of involuntary part-time employment," Labour Economics, Elsevier, vol. 67(C).
    3. Olivier Charlot & Idriss Fontaine & Thepthida Sopraseuth, 2019. "Employment Fluctuations, Job Polarization and Non-Standard Work: Evidence from France and the US," THEMA Working Papers 2019-14, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    4. Etienne Lalé, 2019. "Search and Multiple Jobholding," Upjohn Working Papers and Journal Articles 19-305, W.E. Upjohn Institute for Employment Research.
    5. Gabriela Galassi, 2021. "Labor Demand Response to Labor Supply Incentives: Lessons from the German Mini-Job Reform," Staff Working Papers 21-15, Bank of Canada.
    6. Kang, Hyunju & Park, Jaevin & Suh, Hyunduk, 2020. "The rise of part-time employment in the great recession: Its causes and macroeconomic effects," Journal of Macroeconomics, Elsevier, vol. 66(C).
    7. Schaefer, Daniel & Singleton, Carl, 2019. "Cyclical labor costs within jobs," European Economic Review, Elsevier, vol. 120(C).
    8. Fontaine, Idriss, 2019. "Dynamics of part-time employment to an aggregate shock: A sign-restriction approach," Economics Letters, Elsevier, vol. 183(C), pages 1-1.
    9. Toshihiko Mukoyama & Mototsugu Shintani & Kazuhiro Teramoto, 2018. "Cyclical Part-Time Employment in an Estimated New Keynesian Model with Search Frictions," Working Papers gueconwpa~18-18-04, Georgetown University, Department of Economics.
    10. Galassi, Gabriela, 2021. "Labor Demand Response to Labor Supply Incentives: Lessons from the German Mini-Job Reform," IZA Discussion Papers 14248, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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