How Bad is Involuntary Part-Time Work?

57 Pages Posted: 7 Mar 2016

See all articles by Daniel Borowczyk-Martins

Daniel Borowczyk-Martins

Copenhagen Business School

Etienne Lalé

University of Quebec at Montreal (UQAM) - Université du Québec à Montréal; CIRANO; IZA

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Abstract

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.

Keywords: employment, involuntary part-time work, welfare, Great Recession

JEL Classification: E21, E32, J21

Suggested Citation

Borowczyk-Martins, Daniel and Lalé, Etienne, How Bad is Involuntary Part-Time Work?. IZA Discussion Paper No. 9775. Available at SSRN: https://ssrn.com/abstract=2742563

Daniel Borowczyk-Martins (Contact Author)

Copenhagen Business School ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

Etienne Lalé

University of Quebec at Montreal (UQAM) - Université du Québec à Montréal ( email )

CP 8888 Succ Centre Ville
Montréal, Québec H3C3P8
Canada

CIRANO ( email )

2020 rue University, 25th floor
Montreal H3C 3J7, Quebec
Canada

IZA ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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