The Welfare Effects of Involuntary Part-time Work

Daniel Borowcyzk-Martins and Etienne Lalé ()
Authors registered in the RePEc Author Service: Daniel Borowczyk-Martins

Bristol Economics Discussion Papers from School of Economics, University of Bristol, UK

Abstract: Employed individuals in the U.S. are increasingly more likely to work part-time involuntarily than to be unemployed. Spells of involuntary part-time work are different from unemployment spells: a full-time worker who takes on a part-time job suffers an earnings loss while remaining employed, and is unlikely to receive income compensation from publicly provided insurance programs. We analyze these differences through the lens of an incomplete-market, job-search model featuring unemployment risk alongside an additional risk of involuntary part-time employment. A calibration of the model consistent with U.S. institutions and labour market dynamics shows that involuntary part-time work generates lower welfare losses relative to unemployment. This finding relies critically on the much higher probability to return to full-time employment from part-time work. We interpret it as a premium in access to full-time work faced by involuntary part-time workers, and use our model to tabulate its value in consumption-equivalent units.

Keywords: Involuntary part-time work; Unemployment; Welfare (search for similar items in EconPapers)
JEL-codes: E21 E32 J21 (search for similar items in EconPapers)
Pages: 37 pages.
Date: 2016-04-13, Revised 2016-12-12
New Economics Papers: this item is included in nep-dge, nep-mac, nep-pbe and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The welfare effects of involuntary part-time work (2018)
Working Paper: The Welfare Effects of Involuntary Part-Time Work (2016)
Working Paper: The Welfare Effects of Involuntary Part-Time Work (2016)
Working Paper: The Welfare Effects of Involuntary Part-Time Work (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:bri:uobdis:16/673

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