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Underemployment in the UK in the Great Recession

Published online by Cambridge University Press:  26 March 2020

David N.F. Bell  and
David G. Blanchflower
David N.F. Bell*
Affiliation:
Department of Economics, University of Stirling and IZA
David G. Blanchflower*
Affiliation:
Economics Department, Dartmouth College, University of Stirling, IZA, CESifo and NBER
*
e-mail [email protected]
e-mail [email protected]
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Abstract

One of the main puzzles associated with the Great Recession has been the muted increase in recorded unemployment in the UK. In this paper we explore possible explanations for the behaviour of the UK labour market during the period of the recession. We establish that there has been significant underemployment, which partly explains the sluggish increase in unemployment, but also means that (i) significant numbers of workers are supplying fewer hours of work than they would like and (ii) when recovery comes, profit maximising employers are likely to increase the hours of existing workers, rather than making new hires. This particularly disadvantages the young. Our new analysis points to significant levels of underemployment among younger age groups — whether this is measured in relation to their actual hours of work, their desired hours of work, or their labour force participation.

Keywords

UnemploymentunderemploymentJ23J64
Type
Research Articles
Information
National Institute Economic Review , Volume 215 , January 2011 , pp. R23 - R33
Copyright
Copyright © 2011 National Institute of Economic and Social Research

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