![]() ![]() 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 (Yellen 2014 provides a concise summary of these alternatives).Äistinguishing between cyclical and structural factors is difficult using conventional aggregate measures of part-time work and other labor market indicators. 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. One interpretation is that this is a cyclical phenomenon associated with general weakness in the labor market. The prevalence of such involuntary part-time work has remained unusually high in the aftermath of the Great Recession. People who work part time but would prefer to work full time make up a small but important portion of the labor force. This suggests that involuntary part-time work may remain significantly above its pre-recession level as the labor market continues to recover. However, structural factors such as changes in industry composition, population demographics, and labor costs have also contributed. Analysis across states and over time indicates that a substantial part of the increase is related to the business cycle. This may reflect more labor market slack than is captured by the unemployment rate alone. The incidence of involuntary part-time work surged during the Great Recession and has stayed unusually high during the recovery. ![]()
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