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How Bad Is Involuntary Part-time Work?

Listed author(s):
  • Borowczyk-Martins, Daniel

    ()

    (Copenhagen Business School)

  • Lalé, Etienne

    ()

    (University of Québec at Montréal)

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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 9775.

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Length: 57 pages
Date of creation: Feb 2016
Handle: RePEc:iza:izadps:dp9775
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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. Jung, Philip & Kuhn, Moritz, 2012. "Earnings Losses and Labor Mobility over the Lifecycle," IZA Discussion Papers 6835, Institute for the Study of Labor (IZA).
  3. 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.
  4. Jung, Philip & Kuhn, Moritz, 2012. "Earnings losses and labor mobility over the life-cycle," MPRA Paper 40287, University Library of Munich, Germany.
  5. 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.
  6. 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.
  7. Katharine G. Abraham & Susan N. Houseman, 2014. "Short-Time Compensation as a Tool to Mitigate Job Loss? Evidence on the U.S. Experience During the Recent Recession," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(4), pages 543-567, October.
  8. Greg Kaplan & Giovanni L. Violante, 2014. "A Model of the Consumption Response to Fiscal Stimulus Payments," Econometrica, Econometric Society, vol. 82(4), pages 1199-1239, 07.
  9. Cahuc, Pierre & Carcillo, Stéphane, 2011. "Is Short-time Work a Good Method to Keep Unemployment Down?," CEPR Discussion Papers 8214, C.E.P.R. Discussion Papers.
  10. Moscarini, Giuseppe & Thomsson, Kaj, 2006. "Occupational and Job Mobility in the US," Working Papers 19, Yale University, Department of Economics.
  11. Leslie S. Stratton, 1996. "Are “Involuntary†Part-Time Workers Indeed Involuntary?," ILR Review, Cornell University, ILR School, vol. 49(3), pages 522-536, April.
  12. 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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