Why is Involuntary Part-Time Work Elevated?

Decomposition of yearly change in involuntary part-time work


Despite substantial improvement in the unemployment rate and several other labor market indicators, the number of Americans involuntarily working part time (also called “part-time for economic reasons”) remains unusually high nearly five years into the recovery. The high level of involuntary part-time work has led to a concern that there is an underbelly of labor market slack not well accounted for by the overall unemployment rate. Our analysis suggests there are reasons to believe that continued cyclical improvement in the labor market will put downward pressure on involuntary part-time work, but there is also a possibility that secular trends may augur structurally higher part-time employment.

FEDS Notes. Washington: Board of Governors of the Federal Reserve System, April 14, 2014.
Christopher J. Nekarda
Christopher J. Nekarda
Principal Economist

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