NCPA - National Center for Policy Analysis

Is Involuntary Part-Time Work is Here to Stay?

June 10, 2015

The incidence of involuntary part-time work surged during the Great Recession and has stayed unusually high during the recovery.

Potential causes of the increase in part-time work are:

  • More labor market slack than is captured by the unemployment rate alone;
  • A substantial part of the increase is related to the business cycle;
  • Structural factors such as changes in industry composition, population demographics, and labor costs.

This suggests that involuntary part-time work may remain significantly above its pre-recession level as the labor market continues to recover.

People who work part time but would prefer to work full time make up a small but important portion of the labor force. The prevalence of such involuntary part-time work has remained unusually high in the aftermath of the Great Recession. One interpretation is that this is a cyclical phenomenon associated with general weakness in the labor market. From this perspective, involuntary part-time employment represents idle labor resources, or labor market slack, that is relevant for assessing how close the economy is to the Federal Reserve's maximum employment goal.

Alternatively, the high level of involuntary part-time work may reflect structural changes in the labor market that have caused employers to shift away from full-time workers on a more permanent basis.

Recent findings suggest the high level of involuntary part-time employment since 2006 reflects both cyclical and structural influences.

Source: Rob Valletta and Catherine ver der List, "Involuntary Part-Time Work: Here to Stay?" Federal Reserve Bank of San Francisco, June 8, 2015. 


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