Quarter 3 2013 Underemployment

Here are the latest data on our undereployment index from the 3rd quarter 2013 Labour Force Survey. It is shown alongside the conventionally measured unemployment rate. Both series are seasonally adjusted. Both show a slight reduction in the third quarter.

Feb 2014 Data UnempUnderemp Rate

The next figure shows the evolution of the number of hours extra that workers wished to work alongside the reduction in hours of work that others desired (in millions of hours). The gap between these narrowed slightly in the third quarter of 2013.

Feb 2014 Data More Hours Fewer Hours

The data used to produce these graphs are shown in the table below:

Underemployment Unemployment More Hours Fewer Hours
2001 q2 4.8 5.0 22.68 25.56
q3 4.8 5.1 22.67 25.34
q4 5.0 5.2 22.8 25.12
2002 q1 4.9 5.2 22.21 25.68
q2 4.9 5.2 23.03 25.77
q3 5.1 5.3 23.1 25.57
q4 4.8 5.1 22.49 25.69
2003 q1 5.0 5.2 22.98 25.64
q2 4.7 4.9 23.18 26.04
q3 4.6 5.1 22.91 26.95
q4 4.5 4.9 22.99 27.23
2004 q1 4.5 4.8 22.69 25.7
q2 4.4 4.8 22.51 26.81
q3 4.3 4.7 22.29 25.58
q4 4.5 4.7 22.16 24.92
2005 q1 4.4 4.7 22.01 25.48
q2 4.8 4.8 23.21 23.63
q3 4.6 4.8 22.7 23.96
q4 5.1 5.2 23.51 24.47
2006 q1 5.3 5.3 24.39 24.63
q2 5.7 5.5 24.56 23.9
q3 5.6 5.5 25.1 24.03
q4 5.8 5.5 25.59 23.75
2007 q1 5.8 5.5 25.5 23.61
q2 5.5 5.4 25.67 24.92
q3 5.5 5.3 26.28 25.19
q4 5.3 5.2 26.79 25.81
2008 q1 5.5 5.2 26.69 24.44
q2 5.7 5.4 26.08 23.63
q3 6.5 5.9 28.32 22.68
q4 7.3 6.4 29.71 21.32
2009 q1 8.2 7.1 31.78 21.6
q2 9.2 7.8 34.51 21.2
q3 9.3 7.9 34.59 21.56
q4 9.1 7.8 34.73 22.17
2010 q1 9.5 8.0 36.18 22.78
q2 9.2 7.9 35.89 23.45
q3 9.4 7.7 38.22 22.63
q4 9.6 7.8 38.09 21.9
2011 q1 9.2 7.8 37.77 23.33
q2 9.7 7.9 38 21.55
q3 10.1 8.3 38.81 21.54
q4 10.3 8.4 40.08 21.83
2012 q1 10.0 8.2 40.11 22.72
q2 10.0 8.0 40.79 22.47
q3 9.7 7.8 40.43 22.63
q4 9.8 7.8 41.66 22.6
2013 q1 9.8 7.8 41.95 22.39
q2 9.7 7.8 42.08 23.32
q3 9.4 7.6 41.67 24.16

2nd Quarter 2013

Underemployment Master Chart1

Click on the chart to see it full-size.

Data

Date ONS Unemployment (SA) Underemployment (NSA) Underemployment (SA)
2001 q2 5.0 4.6 4.8
q3 5.1 5.2 4.8
q4 5.2 4.7 5.0
2002 q1 5.2 5.0 4.9
q2 5.2 4.7 4.9
q3 5.3 5.4 5.1
q4 5.1 4.6 4.8
2003 q1 5.2 5.0 5.0
q2 4.9 4.5 4.7
q3 5.1 5.0 4.6
q4 4.9 4.2 4.5
2004 q1 4.8 4.6 4.5
q2 4.8 4.2 4.4
q3 4.7 4.7 4.3
q4 4.7 4.3 4.5
2005 q1 4.7 4.5 4.4
q2 4.8 4.6 4.8
q3 4.8 5.0 4.6
q4 5.2 4.9 5.1
2006 q1 5.3 5.4 5.3
q2 5.5 5.5 5.7
q3 5.5 6.0 5.6
q4 5.5 5.5 5.8
2007 q1 5.5 5.8 5.8
q2 5.4 5.3 5.5
q3 5.3 5.8 5.5
q4 5.2 5.1 5.3
2008 q1 5.2 5.5 5.5
q2 5.4 5.5 5.7
q3 5.9 6.8 6.5
q4 6.4 7.1 7.2
2009 q1 7.1 8.2 8.2
q2 7.8 9.1 9.3
q3 7.9 9.7 9.3
q4 7.8 8.9 9.1
2010 q1 8.0 9.5 9.5
q2 7.9 9.0 9.2
q3 7.7 9.8 9.4
q4 7.8 9.4 9.6
2011 q1 7.8 9.2 9.2
q2 7.9 9.5 9.7
q3 8.3 10.4 10.1
q4 8.4 10.1 10.3
2012 q1 8.2 10.0 10.0
q2 8.0 9.8 10.0
q3 7.8 10.0 9.6
q4 7.8 9.6 9.8
2013 q1 7.8 9.8 9.8
q2 7.8 9.5 9.7
NSA = Not seasonally adjusted
SA = Seasonally adjusted

 

The Measurement of Underemployment in the US: Peterson Institute Working Paper 13-7, August 2013

Unemployment rates in the United States have been slow to fall over the last couple of years despite a modest growth in the number of people employed. The increase in non-farm payrolls has averaged 191,000 a month over the last year, but the number of unemployed has fallen only by about 81,000 a month. In addition, average weekly hours of all employees have risen (to 34.5 in June 2013 from 33.8 in June 2009). What explains rising hours and rising employment but slowly falling unemployment? Bell and Blanchflower suggest that one factor is the extent to which workers already employed prefer to work more hours to fill the increasing needs of their employers. As a result, as demand grows, employers may first offer more hours to existing workers before hiring new people. The authors have captured this “excess capacity” in the UK labor market using UK data. Their “underemployment index” reveals that the potential for existing workers to take advantage of the recovery by increasing hours rather than creating new jobs, at the expense of the unemployed, is significant. Similar data do not exist in the United States, however, but the authors recommend that the Bureau of Labor Statistics produce the data needed to construct an equivalent US index.

 

Underemployment in the UK in the Great Recession

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 established that there has been (i) significant underemployment, which partly explains the sluggish increase in unemployment, but also that 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 the 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 the actual hours of work their desired hours of work or their labour force participation.

National Institute Economic Review January 2011 215: R23-R33