The long-term effects of underemployment shocks on voluntary part-time employment

Maciej Albinowski and Agata Rozszczypała
Authors registered in the RePEc Author Service: Agata Rozszczypała

No 03/2026, IBS Working Papers from Instytut Badan Strukturalnych

Abstract: This paper examines the long-term effects of underemployment shocks on part-time employment, with a particular focus on voluntary part-time work. We use regional datasets for the European Union and the United States covering the period 2006-2019. Our empirical strategy combines a difference-in-differences framework with a shift-share instrument for underemployment shocks. In the EU, underemployment shocks are driven not only by an increase in part-time employment, but also by a decrease in the share of part-time employees who are satisfied with their working hours. Underemployment shocks have persistent effects, including a lasting negative impact on voluntary part-time employment. A one percentage point increase in the underemployment rate leads to a voluntary part-time employment rate that is 0.28 percentage points lower five years later. These effects are particularly pronounced among non-tertiary-educated women and in Western Europe. In Central and Eastern Europe, as well as in the US, we do not find statistically significant negative long-term effects of underemployment shocks on voluntary part-time employment.

Keywords: Underemployment; Involuntary part-time employment; Voluntary part-time employment (search for similar items in EconPapers)
JEL-codes: C26 J21 J22 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2026-06
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