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Underemployment and the Lack of Wage Pressure in the UK

Author

Listed:
  • David N.F. Bell
  • David G. Blanchflower

Abstract

In this note, we focus on underemployment as a potential cause of lower wage growth, which itself may have deeper causes, but which has, we would argue, demonstrably changed since the 2008 recession. The gap between our measures of the number of additional hours required by those who want more hours and the number who want less has narrowed recently. Neither have returned to their pre-recession levels. In our view, underemployment remains a major factor in explaining the 2 per cent wage norm that continues to exist in the UK.

Suggested Citation

  • David N.F. Bell & David G. Blanchflower, 2018. "Underemployment and the Lack of Wage Pressure in the UK," National Institute Economic Review, National Institute of Economic and Social Research, vol. 243(1), pages 53-61, February.
    • Handle: RePEc:sae:niesru:v:243:y:2018:i:1:p:r53-r61
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    Cited by:

    1. David Blanchflower & Alex Bryson & Jackson Spurling, 2024. "The wage curve after the Great Recession," Economica, London School of Economics and Political Science, vol. 91(362), pages 653-668, April.
    2. FitzRoy, Felix & Nolan, Michael A., 2020. "Towards Economic Democracy and Social Justice: Profit Sharing, Co-Determination, and Employee Ownership," IZA Discussion Papers 13238, Institute of Labor Economics (IZA).
    3. Guyonne Kalb & Jordy Meekes, 2019. "Wage Growth Distribution and Decline among Individuals: 2001-2017," RBA Annual Conference Papers acp2019-03, Reserve Bank of Australia, revised Jul 2019.
    4. Andre G Ross & Grant Allan & Gioele Figus & Peter McGregor & J Kim Swales & Karen Turner, 2018. "The economic impacts of UK trade-enhancing industrial policies and their spillover effects on the energy system," Working Papers 1810, University of Strathclyde Business School, Department of Economics.
    5. David N. F. Bell & David G. Blanchflower, 2021. "Underemployment in the United States and Europe," ILR Review, Cornell University, ILR School, vol. 74(1), pages 56-94, January.
    6. Ken-ichi Hashimoto & Yoshiyasu Ono & Matthias Schlegl, 2020. "Structural Unemployment, Underemployment, and Secular Stagnation," CESifo Working Paper Series 8318, CESifo.
    7. FitzRoy, Felix & Nolan, Michael A., 2021. "The Inefficiency of Employment and the Case for Workplace Democracy," IZA Discussion Papers 14065, Institute of Labor Economics (IZA).
    8. Congregado, Emilio & Garcia-Clemente, Javier & Rubino, Nicola & Vilchez, Inmaculada, 2023. "Testing hysteresis for the US and UK involuntary part-time employment," MPRA Paper 118115, University Library of Munich, Germany.
    9. Hashimoto, Ken-ichi & Ono, Yoshiyasu & Schlegl, Matthias, 2023. "Structural unemployment, underemployment, and secular stagnation," Journal of Economic Theory, Elsevier, vol. 209(C).
    10. Ken-ichi Hashimoto & Yoshiyasu Ono & Matthias Schlegl, 2020. "Structural Unemployment, Underemployment, and Secular Stagnation," CESifo Working Paper Series 8318, CESifo.
    11. Ms. Era Dabla-Norris & Carlo Pizzinelli & Jay Rappaport, 2019. "Job Polarization and the Declining Fortunes of the Young: Evidence from the United Kingdom," IMF Working Papers 2019/216, International Monetary Fund.
    12. Andrew G Ross & Grant Allan & Gioele Figus & Peter G McGregor & J Kim Swales & Karen Turner, 2018. "The economic impacts of UK fiscal policies and their spillover effects on the energy system," Working Papers 1820, University of Strathclyde Business School, Department of Economics.
    13. Bell, David N.F. & Blanchflower, David G., 2019. "The well-being of the overemployed and the underemployed and the rise in depression in the UK," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 180-196.

    More about this item

    Keywords

    unemployment; underemployment; wage inflation; hours; anchoring; heuristics;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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