Employment Adjustment and Part-Time Work: Lessons from the United States and the United Kingdom
American Economic Journal: Macroeconomics, Vol. 11(1), January 2019, Pages 389-435.
44 Pages Posted: 8 Dec 2014 Last revised: 9 Jan 2019
Date Written: December 1, 2017
We document that fluctuations in part-time employment play a major role in movements in hours per worker during cyclical swings in the labor market. Building on this result, we develop a stock-flow framework to describe the dynamics of part-time employment. The evolution of part-time employment is predominantly explained by cyclical changes in transitions between full-time and part-time employment. Those transitions occur overwhelmingly at the same employer, entail sizable changes in individuals’ working hours and are associated with an increase in involuntary part-time work. Our findings provide a novel understanding of the cyclical dynamics of labor adjustment on the intensive margin.
Keywords: Employment, Hours, Part-time Work, Business Cycles, Demand and Supply of Labor
JEL Classification: E24, E32, J21, J23
Suggested Citation: Suggested Citation