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Underemployment in the US and Europe


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


Large numbers of part-time workers around the world, both those who choose to be part-time and those who are there involuntarily and would prefer a full-time job report they want more hours. Full-timers who say they want to change their hours mostly say they want to reduce them. When recession hit in most countries the number of hours of those who said they wanted more hours, rose sharply and there was a fall in the number of hours that full-timers wanted their hours reduced by. Even though the unemployment rate has returned to its pre-recession levels in many advanced countries, underemployment in most has not. We produce estimates for a new, and better, underemployment rate for twenty-five European countries. In most underemployment remains elevated. We provide evidence for the UK and the US as well as some international evidence that underemployment rather than unemployment lowers pay in the years after the Great Recession. We also find evidence for the US that falls in the home ownership rate have helped to keep wage pressure in check. Underemployment replaces unemployment as the main influence on wages in the years since the Great Recession.

Suggested Citation

  • David N.F. Bell & David G. Blanchflower, 2018. "Underemployment in the US and Europe," NBER Working Papers 24927, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:24927
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    Cited by:

    1. Ramskogler, Paul, 2021. "Labour market hierarchies and the macro-economy – Do labour market dualities affect wage growth in Europe?," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 154-165.
    2. Giovanni DOSI & Maria Enrica VIRGILLITO, 2019. "Whither the evolution of the contemporary social fabric? New technologies and old socio‐economic trends," International Labour Review, International Labour Organization, vol. 158(4), pages 593-625, December.
    3. Tommaso Ciarli & Mattia Di Ubaldo & Maria Savona, 2019. "Innovation and Self-Employment," SPRU Working Paper Series 2019-17, SPRU - Science Policy Research Unit, University of Sussex Business School.
    4. Borowczyk-Martins, Daniel & Lalé, Etienne, 2020. "The ins and outs of involuntary part-time employment," Labour Economics, Elsevier, vol. 67(C).
    5. Jose Garcia-Louzao & Kristijonas Vėlyvis, 2021. "Beyond the Traditional Unemployment Rate during Covid-19 in Lithuania," Bank of Lithuania Occasional Paper Series 40, Bank of Lithuania.
    6. Edward Yates & Ian Clark & William Rossiter, 2021. "Local economic governance strategies in the UK’s post-industrial cities and the challenges of improving local work and employment conditions," Local Economy, London South Bank University, vol. 36(2), pages 115-132, March.
    7. Sune Karlsson & Pär Österholm, 2020. "A note on the stability of the Swedish Phillips curve," Empirical Economics, Springer, vol. 59(6), pages 2573-2612, December.
    8. Byrne, David & Zekaite, Zivile, 2020. "Non-linearity in the wage Phillips curve: Euro area analysis," Economics Letters, Elsevier, vol. 186(C).
    9. Bańbura, Marta & Bobeica, Elena, 2023. "Does the Phillips curve help to forecast euro area inflation?," International Journal of Forecasting, Elsevier, vol. 39(1), pages 364-390.
    10. Walter Paternesi Meloni & Antonella Stirati, 2023. "The decoupling between labour compensation and productivity in high‐income countries: Why is the nexus broken?," British Journal of Industrial Relations, London School of Economics, vol. 61(2), pages 425-463, June.
    11. Pahontu, Raluca L., 2022. "Divisive jobs: three facets of risk, precarity, and redistribution," LSE Research Online Documents on Economics 111593, London School of Economics and Political Science, LSE Library.
    12. Fontanari, Claudia & Palumbo, Antonella & Salvatori, Chiara, 2022. "The updated Okun method for estimation of potential output with alternative measures of labor underutilization," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 158-178.
    13. Ms. Yuanyan S Zhang, 2019. "European Wage Dynamics and Spillovers," IMF Working Papers 2019/156, International Monetary Fund.
    14. Daniel Francois Meyer & Precious Mncayi, 2021. "An Analysis of Underemployment among Young Graduates: The Case of a Higher Education Institution in South Africa," Economies, MDPI, vol. 9(4), pages 1-16, December.
    15. Yasemin ÖZERKEK & Fatma DİDİN SÖNMEZ, 2021. "Labor Underutilization in European Countries: Some Facts About Age and Gender," Yildiz Social Science Review, Yildiz Technical University, vol. 7(2), pages 137-146, December .
    16. Preethi Pratap & Alison Dickson & Marsha Love & Joe Zanoni & Caitlin Donato & Michael A. Flynn & Paul A. Schulte, 2021. "Public Health Impacts of Underemployment and Unemployment in the United States: Exploring Perceptions, Gaps and Opportunities," IJERPH, MDPI, vol. 18(19), pages 1-25, September.
    17. Byrne, David & Zekaite, Zivile, 2018. "Missing wage growth in the euro area: is the wage Philips curve non-linear?," Economic Letters 9/EL/18, Central Bank of Ireland.
    18. Joohun Han & Chanjin Chung, 2021. "Impact of Aging and Underemployment on Income Disparity between Agricultural and Non-Agricultural Households," Sustainability, MDPI, vol. 13(21), pages 1-15, October.
    19. Jesus Felipe & Yasuyuki Sawada & Gemma Estrada & Donna Faye Bajaro, 2020. "Why do Filipinos desire to work more hours?," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 34(2), pages 106-132, November.

    More about this item

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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