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How Bad is Involuntary Part-time Work?

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  • Daniel Borowczyk-Martins
  • Etienne Lalé

Abstract

We use a set of empirical and analytical tools to conduct parallel analyses of involuntary part-time work and unemployment in the U.S. labor market. In the empirical analysis, we document that the similar cyclical behavior of involuntary part-time work and unemployment masks major differences in the underlying dynamics. Unlike unemployment, variations in involuntary part-time work are mostly explained by its interaction with full-time employment, and since the Great Recession employed workers are at a greater risk of working part-time involuntarily than being unemployed. In the theoretical analysis, we show that the higher probability of regaining full-time employment is key to distinguish involuntary part-time work from unemployment from a worker’s perspective. We also quantify the welfare costs of cyclical fluctuations in involuntary part-time work, and the amplification of these costs arising from the elevated levels of involuntary part-time work observed since the Great Recession.

Suggested Citation

  • Daniel Borowczyk-Martins & Etienne Lalé, 2015. "How Bad is Involuntary Part-time Work?," Bristol Economics Discussion Papers 15/664, Department of Economics, University of Bristol, UK, revised 13 Jan 2016.
  • Handle: RePEc:bri:uobdis:15/664
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    References listed on IDEAS

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    1. Elsby, Michael W.L. & Hobijn, Bart & Şahin, Ayşegül, 2015. "On the importance of the participation margin for labor market fluctuations," Journal of Monetary Economics, Elsevier, vol. 72(C), pages 64-82.
    2. Moscarini, Giuseppe & Thomsson, Kaj, 2006. "Occupational and Job Mobility in the US," Working Papers 19, Yale University, Department of Economics.
    3. Jung, Philip & Kuhn, Moritz, 2012. "Earnings Losses and Labor Mobility over the Lifecycle," IZA Discussion Papers 6835, Institute for the Study of Labor (IZA).
    4. Cahuc, Pierre & Carcillo, Stéphane, 2011. "Is Short-Time Work a Good Method to Keep Unemployment Down?," IZA Discussion Papers 5430, Institute for the Study of Labor (IZA).
    5. Burdett, Kenneth & Wright, Randall, 1989. "Unemployment Insurance and Short-Time Compensation: The Effects on Layoffs, Hours per Worker, and Wages," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1479-1496, December.
    6. Jung, Philip & Kuhn, Moritz, 2012. "Earnings losses and labor mobility over the life-cycle," MPRA Paper 40287, University Library of Munich, Germany.
    7. Stephen R. G. Jones & W. Craig Riddell, 1999. "The Measurement of Unemployment: An Empirical Approach," Econometrica, Econometric Society, vol. 67(1), pages 147-162, January.
    8. Daniel Borowczyk-Martins & Etienne Lalé, 2014. "Employment Adjustment and Part-time Jobs: The US and the UK in the Great Recession," Sciences Po Economics Discussion Papers 2014-17, Sciences Po Departement of Economics.
    9. Leslie S. Stratton, 1996. "Are “Involuntary†Part-Time Workers Indeed Involuntary?," ILR Review, Cornell University, ILR School, vol. 49(3), pages 522-536, April.
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    11. Tomaz Cajner & Dennis Mawhirter & Christopher J. Nekarda & David Ratner, 2014. "Why is Involuntary Part-Time Work Elevated?," FEDS Notes 2014-04-14, Board of Governors of the Federal Reserve System (U.S.).
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    Cited by:

    1. Daniel Borowczyk-Martins & Etienne Lalé, 2018. "The welfare effects of involuntary part-time work," Oxford Economic Papers, Oxford University Press, vol. 70(1), pages 183-205.
    2. Daniel Borowczyk-Martins & Etienne Lalé, 2016. "The Rise of Part-time Employment," Sciences Po publications 2016-04, Sciences Po.

    More about this item

    Keywords

    Employment; Involuntary part-time work; Welfare; Great Recession.;

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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