How to Measure Underemployment?
Unemployment rates in the United States have been slow to fall over the last couple of years despite a modest growth in the number of people employed. The increase in nonfarm payrolls has averaged 191,000 a month over the last year, but the number of unemployed has fallen only by about 81,000 a month. In addition, average weekly hours of all employees have risen (to 34.5 in June 2013 from 33.8 in June 2009). What explains rising hours and rising employment but slowly falling unemployment? Bell and Blanchflower suggest that one factor is the extent to which workers already employed prefer to work more hours to fill the increasing needs of their employers. As a result, as demand grows, employers may first offer more hours to existing workers before hiring new people. The authors have captured this "excess capacity" in the UK labor market using UK data. Their "underemployment index" reveals that the potential for existing workers to take advantage of the recovery by increasing hours rather than creating new jobs, at the expense of the unemployed, is significant. Similar data do not exist in the United States, however, but the authors recommend that the Bureau of Labor Statistics produce the data needed to construct an equivalent US index.
|Date of creation:||Aug 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.piie.com
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David N. F. Bell & David G. Blanchflower, 2011.
"Young people and the Great Recession,"
Oxford Review of Economic Policy,
Oxford University Press, vol. 27(2), pages 241-267.
- David G. Blanchflower & Andrew J. Oswald, 2000.
"Well-Being Over Time in Britain and the USA,"
NBER Working Papers
7487, National Bureau of Economic Research, Inc.
- Blanchflower, David G. & Oswald, Andrew J., 2001. "Well-Being Over Time in Britain and the USA," The Warwick Economics Research Paper Series (TWERPS) 616, University of Warwick, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:iie:wpaper:wp13-7. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peterson Institute webmaster)
If references are entirely missing, you can add them using this form.