Underemployment in the UK revisited.
Bell, David N.F. ; Blanchflower, David G.
This paper addresses the issue of underemployment in the UK labour
market--the demand for hours of work is less than workers'
willingness to supply extra hours. Workers would like to work more
hours, but there is insufficient product demand to justify additional
hours. This phenomenon has been evident in the UK labour market for some
time, but has grown significantly during the Great Recession. In this
paper, we develop a new index of underemployment which is intended to
combine indicators of excess capacity on the extensive (jobs) and
intensive (hours) margins of the labour marker. This index continued to
increase during 2012, though unemployment was stable. The paper also
investigates the microeconomic determinants of underemployment, finding
that it is particularly prevalent among the young and unqualified.
Keywords: Unemployment; underemployment; under-utilisation
JEL Classifications: J01; J11; J21; J23; J38; J64
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The unemployment rate is the most common measure of labour market
slack. It shows how many people are actively seeking work and are
without a job, expressed as a proportion of the labour force, which is
the employed plus the unemployed. The unemployment rate in the UK rose
from a low of 5.2 per cent at the end of 2007 to a high of 8.4 per cent
at the end of 2011 before falling back to 7.8 per cent at the start of
2013. But during the Great Recession we have also seen a steady increase
in the UK in the number of the employed who want more work than is
currently available to them--they are underemployed. This may partly be
explained by falling real wages, which has also been a feature of the
recession. For some people, principally home-owners with a variable rate
or tracker mortgage, low interest rates have partly compensated for
declining real wages. Nevertheless, it is now our view that there has
been such a dramatic increase in underemployment that the unemployment
rate is now a poorer indicator of the degree of slack in the labour
market than it has been in the recent past. Further, estimates of the
'output gap' that rely on the unemployment rate may be giving
a seriously misleading estimate of the degree of excess capacity in the
UK labour market.
The underemployed are defined as those currently in work who would
prefer to work longer hours. Their ability to supply hours at the
current wage is constrained by the level of demand in the economy,
because there simply isn't enough work around. Some of these people
are classified in the official statistics as part-timers who would
prefer to be full-time, but the phenomenon also applies to full-timers,
which is not reported in the published Office for National Statistics
(ONS) statistics. We have addressed this issue in an earlier article in
this journal (Bell and Blanchflower, 2010). There, we suggested that
underemployment might be associated with labour hoarding, the use of
part-time and temporary contracts. It was facilitated by the flexibility
of the UK labour market and was a particular problem amongst the young.
A recession might also increase the number of discouraged workers who
choose to leave the labour market. We showed that the underemployed are
more likely to be depressed, suggesting that hours constraints have a
negative effect on their well-being.
In this paper, we extend and update our analysis of
underemployment. Firstly, we examine the evolution of underemployment
since 2010, noting that it has risen over this period, at the same time
as real wages have been falling sharply. (1) Secondly, we define a new
measure --the underemployment index. Unlike the unemployment rate, which
measures the excess supply of people in the labour market, the
underemployment index measures the excess supply of hours in the
economy. It combines the hours that the unemployed would work if they
could find a job with the change in hours that those already in work
would prefer. Thus it captures both the intensive and extensive margins
of the labour market. We show that the gap between the unemployment rate
and our underemployment index has widened over time and at the beginning
of 2013 is at a historically high level.
I. The evolution of underemployment
Table 1 provides some background data on the labour market. These
include employment, unemployment and the residual category of
out-of-the-labour force (OLF), which consists of students, home workers,
the disabled and the retired. The total population aged 16+ is also
reported. The table also provides estimates of aggregate underemployment
for 2008, when the recession began; for 2010 when we wrote our previous
article; and for 2012, which uses the most recent data point available
for November 2012 to January 2013. Table 1 Part A shows that since the
recession began unemployment rose from 1,620,000 (5.2 per cent of the
labour force) in December-February 2008 to 2.5 million (7.9 per cent)
when the coalition government took office (April-June 2010) to 2,516,000
(7.8 per cent) in the latest data (November-January 2013) at the time of
writing.
[FIGURE 1 OMITTED]
Claims that employment is at the highest level ever are correct but
this rise is coincident with the population aged 16+ being at an
all-time high. The 16+ population has risen by 1.8 million since the
start of the recession and by 950,000 since the coalition took office.
As can be seen from figure 1, which plots the employment rate--defined
as 16+ employment divided by the 16+ population--it is markedly lower in
2012 than it was for almost the entire ten-year period under Labour from
1997-2007. Employment in December 2012 was 233,000 higher than it was in
January 2008, although the proportion of the 16+ population that are
employed was much lower in 2012 (60.3 per cent and 58.6 per cent
respectively), driven by the sharp rise in the working-age population
over that time period. Since 2008, the number of fulltime employees has
fallen by 386,000, while the number of part-time employees has increased
by almost 300,000. The number of self-employed has increased by almost
60,000 full timers and, notably, by 253,000 part-timers. The shift to
part-time working is likely the most robust of our previous explanations
of underemployment. In its usual interpretation, labour hoarding is
unlikely to have persisted. There is no evidence that businesses, unlike
the OBR, have consistently erred on the side of optimism.
Part B of table 1 shows that there has been a substantial increase
in indicators of underemployment. Between 2008 and 2012 the number of
part-time workers who want full-time jobs increased by 674,000, while
those out of the labour force (OLF) wishing to find a job increased by
130,000. Between 2008 and 2012, there has been an increase in the demand
for work, both on the extensive and intensive margins of the labour
market.
The ONS has also noted that underemployment has risen sharply,
indeed they calculate that the number of people in work wanting more
hours stood at 3.05 million in April to June 2012. (2) Part C of table 1
presents the most recent data showing the level and rate of
underemployment from 2000-12. The ONS defines underemployment levels and
rates based on the number of workers who express a desire to work more
hours at their current wage rate. These statistics are based on the
Labour Force Survey (LFS), which asks all those who are not looking for
a different or additional job whether they would like to work longer
hours at current basic rate of pay if given the opportunity. Thus it
asks (1) those answering 'yes' to this question; (2) those who
are seeking an additional job; and (3) those who are looking for a
different job because they want to work longer hours, how many
additional hours they would like to work.
Table 2 presents some statistics on those who are seeking longer
working hours at their present rates of pay. We use the weighted micro
data from the LFS for each calendar year from 2008-12. Among all
workers, the proportion looking for a different job has increased from
6.3 per cent in 2008, to 7.6 per cent in 2012. Increases in this
proportion occurred for full-time employees, part-time employees and the
self-employed. Part-timers were most likely to be looking for a new job.
Between 2008 and 2012, this share rose from 7.9 per cent to 10.6 per
cent of employees. The main reasons given for looking for a different
job were little changed between 2011 and 2012. The major reasons given
were that pay was unsatisfactory (19.3 per cent); the present job may
come to an end (17.9 per cent) along with other aspects of the job (15.8
per cent). Only 8.6 per cent said they wanted longer hours while 2.3 per
cent were looking for another job because they wanted shorter hours.
An increasing proportion of the workforce wished to extend their
hours. From 2008 to 2012, this share increased from 7.4 per cent to 9.9
per cent. This increase was largely driven by part-timers. In 2012,
almost 20 per cent of this group wished to extend their working time. In
contrast, only 6.3 per cent of full-timers wanted longer hours.
Part-timers also sought the largest average increase in their working
time. In 2012, they wished to extend their hours by an average of 13.8
hours, compared with the average of 9.5 hours sought by full-timers.
Those that have relatively short working hours are more likely to desire
more hours and more likely to seek a larger increase in their working
hours.
Fewer self-employed workers than part-time employees sought longer
hours, but conditional on a desire for longer hours, the self-employed
sought an additional 13.4 hours on average. This was almost as many
additional hours as was sought by part-time employees. The LFS suggests
that the self-employed are more hours constrained than full-time
employees. This is surprising given that the self-employed work almost
as many hours per week as do full-time employees. The demand for more
hours among the self-employed may reflect a desire to self-insure
against the effects of fluctuations in product demand, from which they
may be less insulated than employees. Nevertheless, it is surprising
that the self-employed, who can control their working time to a greater
extent than the employed, are so severely hours constrained. The
likelihood is that there is simply not enough work around, which raises
the possibility that some of the self-employed are closer to being
self-unemployed.
We now consider some of the trends in underemployment over a longer
period. In figure 2 we plot the proportion of workers who would like to
work more hours in their existing job without increasing their pay rate.
Unlike unemployment, the rise in underemployment has been almost
continuous since the start of the recession, other than during a brief
period from 2010q2 to 2011q2. By 2012q3, almost 11 per cent of workers
were expressing a desire to work longer hours, compared with an average
of around 7 per cent in the pre-recession period. The table also shows
the proportion of employees responding positively when questioned
whether they would be willing to decrease their hours and accept lower
pay. We describe this group as the overemployed. And as we shall
subsequently discuss, taking account of this group allows us to
calibrate whether there is excess supply or excess demand on the
intensive margin of the labour market. The share of employees seeking
shorter hours has been falling since 2003, though it declined more
steeply at the beginning of the recession. It then fell again following
a partial recovery during 2009 and early 2010. The net effect is that
the numbers of employees wishing to increase their hours have exceeded
the numbers wishing to decrease their hours since early 2011. This has
not occurred since at least early 2001.
Both those wishing to work more hours and those wishing to work
fewer hours are asked how many more or how many fewer hours they would
like to work. The average change in desired hours for the two groups is
shown in figure 3. Desired increases in hours have grown fairly steadily
from 2003, aside from seasonal variation. In contrast, desired
reductions in hours were broadly stable until 2010 and have increased
modestly since then. Aggregate changes in desired weekly hours are given
in figure 4, which shows the sum of the additional weekly hours desired
by those who want to work more hours and the equivalent aggregate for
those who want to work fewer hours. Until 2007, these aggregates largely
balanced out. Desired aggregate increases in hours exceed desired
reductions from the beginning of the Great Recession. The gap between
these aggregates provides a measure of disequilibrium in the labour
market on the intensive margin. This continued to rise through 2012,
while unemployment, a measure of disequilibrium on the extensive margin
of the labour market, rose at the start of the recession, but stabilised
between late 2009 and 2012. Since the start of the recession in 2008 the
number of desired hours has risen from a negative balance, where in
aggregate workers would like to work less hours, to a situation where
they would like to work around 20 million more hours per week. Assuming
full-year workers do 2000 hours this is the equivalent of around half a
million full-time workers.
[FIGURE 2 OMITTED]
[FIGURE 3 OMITTED]
[FIGURE 4 OMITTED]
One factor influencing excess supply on the internal margin has
been the fall in real consumer wages, showing how a fall in real wages
in a demand-constrained labour market may lead to workers expressing
increased demand for hours. Figure 5 illustrates. For a more
comprehensive treatment see Naylor (2003).If the substitution effect is
dominant and workers are initially at equilibrium at point A, then a
reduction in the real wage, along with an hours constraint at h*, leads
to workers being constrained at point C. Optimising leads to higher
utility at point B. If workers are not prepared or able to move, then
they are likely to express a desire to work an additional hB-h* hours.
Such constraints clearly pose difficulties for the estimation of labour
supply functions as Ham (1982) notes.
[FIGURE 5 OMITTED]
[FIGURE 6 OMITTED]
Figure 6 shows there has been a significant decline in UK real
wages since the end of 2007. It plots Average Weekly Earnings (AWE),
which is the National Statistic on earnings minus the Consumer Price
Index (CPI), by month. Since the start of the recession in 2008, the CPI
has risen by 17 per cent while average weekly earnings have risen by 7
per cent, suggesting that real earnings have fallen by approximately one
tenth during this period. The trend has been almost uniformly negative,
except for a brief spike in early 2010 that saw the economy grow by 2.7
per cent in the five quarters from 2009q3 to 2010q3. Since then, as the
economy has flat-lined, growing only 0.4 per cent between 2010q4 and
2012q4, real wages have continued to fall. If substitution effects
continue to dominate income effects, falling real wages are likely to
lead to a greater increase in the numbers wishing to increase their
wages and a decline in the number seeking fewer hours, which is clearly
consistent with recent trends in over-and underemployment.
In the next section, we use the information on desired hours of
work to construct an index of excess capacity in the UK labour market,
which incorporates the unemployment rate, but also takes account of the
net balance of over and under-employment.
2. The underemployment index
In this section we construct an underemployment index which
combines measures of excess capacity on the intensive (hours) and
extensive (jobs) margins of the labour market. Our measure is more
general than the unemployment rate because it is affected by the
willingness of current workers to supply additional
hours--underemployment. It is also different from the underemployment
rate calculated by the ONS reported in table 1C because it counts the
number of hours workers say they want to work--whether more or less --at
going rates of pay. The ONS simply counts up the numbers who say they
want more hours. For any given unemployment rate, a higher
underemployment index implies that reductions in unemployment will be
more difficult to achieve because existing workers are seeking more
hours--there is excess capacity on the internal labour market. If the
underemployment index is high relative to the unemployment rate and
there is an upturn in demand, cost-minimising producers will offer
existing workers longer hours, so avoiding recruitment costs and the
costs of uncertainty associated with new hires. The unemployment rate
will not fall so rapidly when the underemployment index is high.
We define our underemployment index in hours space. Like the
unemployment rate, it is expressed as a percentage. It can be thought of
as measuring the ratio of net unemployed hours to total available hours
assuming that the hours preferences of the employed at current wages are
met. It implicitly assumes that the employed who do not express a wish
to change their hours are content with these hours and that the
unemployed would wish to work the same number of hours as the employed,
on average. (3) We begin by transforming the unemployment rate into a
measure based on hours. Equation i incorporates hours of work into the
definition of the unemployment rate. The unemployment rate implicitly
allocates equal hours to the employed and the unemployed. We set these
hours at [bar.h], average hours worked by employed workers. The term
involving the product of average hours worked and employment is by
definition equal to the sum of all hours worked in the economy.
u = U/[U + E] = U[bar.h]/[U[bar.h] + E[bar.h]] = U[bar.h]/
[U[bar.h] + [summation over (i)]] [h.sub.i] (1)
The next step is to add the intensive margin of the labour market.
Preferences over hours are not realised for all workers; some say they
want more hours, others would prefer fewer hours. We include these
stated preferences in our index, taking them at face value. The sum of
preferred additional hours is given by
[summation over (k)] [[??].sup.U.sub.k]
where the index k is defined over all workers who wish more hours.
Similarly, aggregate preferred reduction in hours is given by
[summation over (j)] [[??].sup.O.sub.j]
where the index j is defined over all workers who wish fewer hours.
We assume that transactions costs prevent exchange of working time
between these groups. Further, it is unlikely that desired changes in
hours will be randomly distributed within firms. Those firms
experiencing weak demand are likely to have more workers wishing longer
hours, reducing the probability of within-firm re-contracting towards a
preferred distribution of hours among workers. To construct our index,
the net effect of the desired changes in hours is added to the numerator
of Equation 1 to complete the underemployment index, u*, which is given
in Equation 2.
[MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII] (2)
If, in aggregate, the desired increase in hours equals the desired
reduction in hours, then u* simply reproduces the unemployment rate;
excess capacity in the labour market is only influenced by the extensive
margin. But u* will differ from the unemployment rate if there is excess
supply (or excess demand) on the internal labour market. The
underemployment index could therefore be greater than, or less than, the
unemployment rate. It would be lower than the unemployment rate when
aggregate desired hours reductions exceed aggregate desired hours
increases. This measure presents a more complete picture of excess
demand or excess supply in the labour market as a whole than does the
unemployment rate because it incorporates disequilibrium on the
extensive margin. This suggests that it may also offer advantages over
the unemployment rate as a means of calibrating the level of excess
capacity in the economy--the so-called output gap.
Suppose the desired aggregate increases and reductions in hours
were equal in size. Our index is not affected by the absolute value of
these desired increases and reductions. It does not capture the extent
of mismatch in the internal labour market. Mismatch would be high when
large numbers of workers wishing to increase their hours co-exist in the
labour market with large numbers wishing to reduce their hours. The sum
of desired hours increases and reductions, which is given by
[summation over (k)] [[??].sup.U.sub.k] [summation over (j)]
[[??].sup.O.sub.j]
is a possible indicator of such mismatch. One might expect mismatch
to be high when there are large variations in product demand among
firms. In those firms where the product market is strong, workers may
wish to reduce hours. Similarly, workers in firms where product demand
is weak may jointly wish to increase their working time.
Our underemployment index is relatively easy to calculate from
successive waves of the LFS micro-data. We add together the desired
additional hours of those who say they want to work more hours.
Similarly, we sum the desired reductions in hours for those who claim
they would like to work fewer hours. We also use the LFS to estimate
employment, unemployment and average hours of work. All of these
statistics are converted to national estimates using weights supplied
with the LFS. We include the employed, self-employed, family workers and
those on government schemes when calculating total employment and
average working hours. Together these calculations provide all five of
the components necessary to calculate our underemployment index which is
u* in Equation 2.
[FIGURE 7 OMITTED]
Following the practice of the ONS, claims of underemployment among
those aged between 16 and 18 and working 40 or more hours and those aged
over 18 and working 48 hours or more are disregarded. (4) Similarly,
those aged between 16 and 18 and working 15 or fewer hours and those
aged over 18 and working 20 hours or less were disregarded.
The evolution of the index between 2001 and 2012 is shown in figure
7 alongside the published unemployment rate. It is clear that from 2001
until 2008 the two measures were closely matched. Though there were more
workers wishing to reduce their hours than increase them over this
period, those wishing to increase their hours wanted, on average, to add
more hours to their workweek than those who wanted fewer hours wished to
give up. Net underemployment was therefore close to zero and the
underemployment index therefore closely followed the unemployment rate.
Since 2008 there has been a divergence between the unemployment
rate and our index (see figure 7). This is caused by increasing numbers
of workers wishing to extend their hours and a fall in the number
wanting fewer hours. Interestingly, though the unemployment rate
stabilised after 2010, the value of u* has continued to increase. This
must have been a consequence of increased net underemployment. We would
argue that the stabilisation of the unemployment rate since 2010 is not
sufficient evidence to conclude that the overall health of the UK labour
market is improving. The increase in our index since 2010 is indicative
of growing excess capacity in the UK labour market.
Do the unemployment rate and our index vary across labour market
categories? We confirm that this is the case in table 3, which shows our
index and published unemployment rates for 2008, 2010 and 2012
calculated separately for a number of labour market categories. To
clarify how the underemployment index is calculated, the 9.9 per cent
for 2012 in the top row of table 3 is worked out as follows: we assume
that the unemployed work the same average hours as the currently
employed, which does not seem unreasonable given their characteristics.
(5) The denominator takes total number of hours worked (918.4 million
per week) which is made up of 28.97 million workers who work an average
of 31.7 hours per week. Added to that is number of unemployed (2.574
million) multiplied by average hours of 31.7 (81.5 million) =999.9
million hours. The numerator is the number of unemployed hours (81.5
million) plus the total extra hours the employed would like to work
=40.6 million minus the number of hours of the people who say they want
to work fewer hours (22.8 million). So we get (81.5+40.622.6)/999.9 =
99.4/999.9 = 9.9 per cent. (6)
The first row of the table confirms the finding of figure 7 that
our index has risen by more than the published unemployment rate,
particularly since 2010. Between 2010 and 2012, the underemployment
index rose from 9.4 to 9.9 per cent, while the unemployment rate hardly
changed. The unemployment rate was 8.0 per cent in 2012, suggesting that
excess hours capacity within firms contributed a further 1.9 per cent to
the overall underutilisation of labour that year.
Table 3 has a number of other striking features. First, not only do
young people aged 16-24 have the highest unemployment rates of any age
group, they also have the greatest gap between their unemployment rate
and their underemployment index. In 2012, the supply of youth labour
exceeded its equilibrium level by 30 per cent. Not only was the
unemployment rate 21.6 per cent, but the shortfall in hours actually
worked over desired hours increased the underemployment index by a
further 8.4 per cent. In contrast, among older workers, the
underemployment index is consistently lower than the unemployment rate.
This is because older workers typically wish to reduce, rather than
increase, their hours, implying that actual hours exceed desired hours
for this group and so the underemployment index is lower than the
unemployment rate. Given that we are including everyone sixteen and over
in this analysis, and given that older workers are more likely to want
fewer hours, in all likelihood the gap between the underemployment rate
and the unemployment rate would be larger if the sample was restricted
to those of working age (16-64).
Although the unemployment rate for men typically exceeds that for
women, the excess capacity indices for both sexes are almost identical.
This implies that women are more likely than men to want to work longer
hours. This is consistent with the evidence from table 2 that
part-timers express relatively high levels of demand for extra hours and
that women are more likely than men to work part-time.
Looking at excess capacity and unemployment rates by ethnic groups,
it seems that those with higher unemployment rates also experience
higher rates of excess labour capacity. This is particularly true in the
'Black or Black British' category, where the unemployment rate
in 2012 was 17.1 per cent and the excess capacity rate was 23.1 per
cent. Interestingly, though the unemployment rate among the Chinese was
somewhat higher than that among whites, the underemployment index for
this group was substantially higher, at 16.7 per cent, in 2012 compared
with a rate of 8.9 per cent among whites. Chinese employees are
substantially more likely to express a desire to work longer hours than
their white counterparts.
Regional estimates of unemployment and excess capacity indices in
table 3 indicate that the Northern region has the highest scores on both
measures. The largest gap between the rates occurs in Wales (2.4 per
cent), indicating that it is the region with the largest net balance of
desired longer hours.
Overall, 19.8 per cent of part-timers and 6.3 per cent of
full-timers reported they wanted more hours. The proportions have been
rising over time as can be seen in table 4, driven primarily by the
steady rise among part-timers, in both the public and private sectors.
(7) The jump in the proportion of full-timers occurred principally
between 2008 and 2009.
We should note, of course, that this rise in underemployment has
not been because of a decline in average hours which haven't
actually fallen since 2008 (Plunkett, 2013). (8) Figure 8 illustrates
plus ONS data which shows that, if anything, there has been an increase
in average hours. According to the ONS average hours for fulltime
workers in January 2008 was 37.0 compared with 37.4 in December 2012; in
the case of part-timers hours worked also increased, going from 15.5 and
15.8 respectively. This suggests that the driving force more likely is
the fall in real wages identified above, rather than a drop in hours.
Workers need to work more hours to pay their bills, which suggests the
economy is not supply (of hours) constrained.
[FIGURE 8 OMITTED]
3. Determinants of underemployment
We finally look more closely into the factors explaining
underemployment by examining its determinants at the individual level
using data on approximately three quarters of a million individuals from
the Labour Force Survey from 2008-12. Table 5 estimates underemployment
equations over preferences between part-time and fulltime employment and
over the number of hours that a worker wishes to work. It is not
restricted to employees only but includes the self-employed, family
workers and those on government training schemes. These groups are also
asked whether they wish to work more hours. Thus columns 1 and 2 model
the probability of a part-timer reporting they would prefer to have a
full-time job using a dprobit estimator where the coefficients can be
interpreted as marginal effects. Column 1 covers all workers while
column 2 is restricted to part-timers only. Columns 3-5 use Ordinary
Least Squares to model the number of hours an individual would like to
work, where the dependent variable is set to zero if the respondent is
content with their working hours. Column 3 is for all workers while
column 4 is for full-timers only and column 5 for part-timers. We
exclude 4025 cases from all four equations, where workers say they would
like fewer hours but they aren't asked how many less. The increase
in the time coefficients in all four columns is clear-underemployment is
rising over time. We examine the two sets of results in turn.
In column 1 it is apparent that the self-employed, women, the
young, Asians, the disabled, in universities, local government and
charities and among those without qualifications are especially likely
to be in part-time jobs that they would prefer to be full-time. Workers
are especially likely to report they are in part-time jobs, that they
would prefer were full-time, in distribution and hotels, and in
Yorkshire and the South West. In column 2 the sample is restricted to
part-timers only and the results are rather different, although there is
still evidence of underemployment among women, the young and the least
educated. Conditional on being in a part-time job, whites are more
likely to say they would like to be full-time than minorities and there
are strong regional and industry effects. It is apparent that part-time
civil servants, who have likely been impacted by public sector spending
cuts, would prefer to be fulltime.
Columns 4-7 report estimates of the number of extra hours workers
would like to work, at current pay rates for all workers and separately
for full-timers and part-timers. (9) We find evidence that full-timers
are looking for less hours than the part-timers (column 3), and men are
looking for more hours, especially if they are part-time. The
self-employed who are part-time are notable in wanting more hours and
these do look like the self-unemployed. Minorities, especially blacks
and the disabled want more hours as do the young. There are big industry
and region of work effects among full-timers but less so among
part-timers.
4. Conclusions
This paper has updated some of the statistics that we previously
presented on underemployment in the UK labour market. It shows that the
magnitude of this phenomenon has continued to grow as the recession has
lengthened in the sense that an increasing proportion of the workforce
wish to extend their hours. There has been a particularly steep, and
perhaps surprising, increase in the numbers of self-employed workers who
would like to work more hours. The increasing numbers of self-employed
in the labour market has been an important feature of the current
recession. Given that a large proportion of this group are seeking
additional working time, a share of the transitions into self-employment
may also reflect lack of opportunities in the rest of the labour market.
Second, we have presented a new underemployment index--a measure of
excess capacity in the labour market that combines information on
unemployment and underemployment. If the internal labour market is in
equilibrium in the sense that the demands for increased hours are
exactly offset by demands for reduced hours, then the underemployment
index reproduces the unemployment rate. Our estimates show an increasing
divergence between the unemployment rate and the underemployment index
since the start of the recession, reflecting the increasing demands
among the workforce to increase working time and reductions in demands
to reduce hours. Because it reflects both the internal and external
labour markets, this index gives perhaps a broader estimate of the
extent of underused capacity in the economy--the output gap--than a
simple measure based on the unemployment rate.
We have also looked at some of the microeconomic determinants of
underemployment. As with unemployment, it is the young and unqualified
that are particularly prone to underemployment. This positive
correlation is particularly unfortunate, since it suggests that the
young unqualified unemployed have a particularly difficult route into
employment since employers may choose to give their peers more hours
before making new hires. This will extend the unemployment durations of
the young, and thus increase the probability that they will experience
long-term scarring effects of unemployment while young, such as future
unemployment spells and reduced wages.
It is our view that this underemployment index should be published
monthly by the ONS by rolling quarter alongside the unemployment rate;
it is not a substitute but a useful complement. The United States
already publishes five series on the extent to which labour market
resources are underutilised, so there is precedent. (10) The benefit of
our underemployment index is that it gives a somewhat different, and
potentially more accurate picture of labour market slack than the
unemployment rate does, particularly in a recession. The data required
to calculate it are already available in the monthly Labour Force Survey
so producing it would be virtually costless.
Perhaps the most important finding we have is that there appears to
be significant slack in the economy. The primary argument made by the
supporters of the government's current macroeconomic stance is that
what's going on in the labour market shows that the UK economy is
primarily supply not demand constrained, that the output gap is small,
and crucially that the labour market statistics show that we are now
quite close to full employment or the NAIRU. The paper potentially deals
quite a big blow to that view by showing that there is very substantial
spare capacity in the labour market; the implication being that if
demand were higher, output could easily be higher, and it could be
higher without exerting any significant upward pressure on real wages.
So any further stimulus, whether fiscal or monetary, would not be
inflationary. People want to work.
Appendix: Data used to construct the underemployment index
Millions of weekly hours
Desired
Reductions Increases 'Unemployed' Total
2001 25.6 22.8 48.6 899.4
2002 25.7 22.7 49.0 887.7
2003 26.5 23.0 47.3 889.6
2004 25.7 22.4 44.9 890.2
2005 24.4 22.9 46.7 908.6
2006 24.0 24.9 53.1 912.7
2007 24.9 26.1 52.4 919.5
2008 23.0 27.7 55.9 915.8
2009 21.6 33.9 74.9 897.1
2010 22.7 37.1 76.9 892.9
2011 22.1 38.7 80.2 905.9
2012 22.7 40.6 81.5 918.4
Published
Underemployment unemployment
index rate
2001 4.8% 5.1%
2002 4.9% 5.2%
2003 4.7% 5.1%
2004 4.4% 4.9%
2005 4.7% 4.9%
2006 5.6% 5.5%
2007 5.5% 5.4%
2008 6.2% 5.8%
2009 9.0% 7.8%
2010 9.4% 8.0%
2011 9.8% 8.2%
2012 9.9% 8.1%
REFERENCES
Bell, D.N.F and Blanchflower D.G. (20 I0), 'UK unemployment in
the Great Recession', National Institute Economic Review, October,
214, R3-R25.
--(2011), 'UK underemployment in the Great Recession',
National Institute Economic Review, January, 215, R23-33.
Ham, J.C. (1982), 'Estimation of a labour supply model with
censoring due to unemployment and underemployment', The Review of
Economic Studies, 49(3), pp. 335-54.
Naylor, R.A. (2003), 'Labour supply, efficient bargains and
countervailing power', in Waterson, M. (Ed.), Competition, Monopoly
and Corporate Governance: Essays in honour of Keith Cowling, Edward
Elgar, pp. 101-16.
Plunkett, J. (2013), 'Sizing the jobs gap,' The
Resolution Foundation.
NOTES
(1) The latest labour market data at the time of writing published
by the ONS showed that average weekly earnings in January 2013 rose by
1.2 per cent whereas the CPI was 2.8 per cent.
(2) http://www.ons.gov.uldons/rel/lmac/underemployed-workers-in-the-uk/2012/sty-underemployed-workers-in-the-uk.html.
(3) We also estimated weekly hours regressions among the employed
using the LFS. We used these estimates to predict hours for the
unemployed. The predicted hours were not significantly different from
mean hours among the employed. Hence we opted for the simpler
formulation using mean hours among the employed.
(4) ONS (2012) http://www.ons.gov.uldons/dcp 171776_289024.pdf.
(5) To check this we estimated a series of hours regressions with
personal controls including gender, age, race, qualifications and region
for each of the 47 waves of the LFS. We used each of these equations to
predict the hours of the unemployed which were very close to the average
hours worked at each time point so for simplicity we opted to use
average hours of the employed. The underemployment index is little
changed therefore using either method.
(6) The appendix reports the data used to construct the
underemployment index.
(7) The public sector variable in the LFS does suffer from quite
significant mis-measurement--the classic example is the person working
in a public sector workplace but for a private sector subcontractor who
classifies himself as a public sector employee. In this case the results
are broadly similar across public and private sectors so such concerns
are not an issue here.
(8) http://www.resolutionfoundation.org/media/media/downloads/TheUK_jobs_gap_2.pdf.
(9) This variable has a mean of 1.32 and a standard deviation of
4.5 with 5 per cent of the distribution reporting 10 hours or more and I
per cent report they want 21 extra hours and more.
(10) The BLS publishes five measures of underutilisation each month
in Table A- 15 in The Employment Situation
http://www.bls.gov/news.release/empsit.nr0.htm.
David N.F. Bell, Stifling Management School, University of
Stirling; IZA; Centre for Population Change. E-mail: dnfbl@stir.ac.uk.
David G. Blanchflower, Dartmouth College; Stirling Management
School, University of Stirling; Peterson Institute for International
Economics; IZA; NBER.
Table 1. Employment, unemployment, temporary workers and part-time
workers and OLF wants a job (ages 16+)
A. Basic Labour Market data ('000s)
OLF Unemployed Employed Population
2008 (Dec-Feb) 9062 1620 29499 48909
2010 (Apr-June) 9358 2471 28975 49771
2012 (Nov-Jan '13) 8954 2516 29732 50717
Employees Self-employed
FT PT FT PT
2008 (Dec-Feb) 18971 6431 2937 933
2010 (Apr-June) 18178 6653 2908 1015
2012 (Nov-Jan '13) 18585 6704 2993 1186
B. Underemployment ('000s)
Temporary Temporary Part-time
couldn't find
permanent
2008 (Dec-Feb) 1443 362 7365
2010 (Apr-June) 1559 565 7667
2012 (Nov-Jan '13) 1638 657 7890
PT would like OLF OLF (16-64)
full-time (16-64) wants a
job
2008 (Dec-Feb) 724 9062 2190
2010 (Apr-June) 1072 9358 2342
2012 (Nov-Jan '13) 1398 8954 2318
Source: ONS Labour Force Statistics, March 2013,
http://www.ons.gov.uk/ons/rel/Ims/labour-market-statistics/
march-2013/statistical-bulletin.html.
C. Underemployed workers in the UK Labour Market, April-June 2000-12
Underemployed Non-underemployed Unknown
workers workers ('000s) ('000s)
(a) ('000S)
2000 2,084 25,033 282
2001 1,826 25,532 285
2002 1,870 25,686 294
2003 1,837 26,004 285
2004 1,783 26,274 304
2005 1,840 26,489 329
2006 1,867 26,754 302
2007 1,963 26,794 339
2008 2,069 26,990 389
2009 2,697 25,708 404
2010 2,740 25,751 410
2011 2,826 25,939 392
2012 3,049 25,870 496
Total(b) Underemployment
('000s) rate(c) (%)
2000 27,117 7.7
2001 27,358 6.7
2002 27,556 6.8
2003 27,842 6.6
2004 28,057 6.4
2005 28,329 6.5
2006 28,621 6.5
2007 28,757 6.8
2008 29,059 7.1
2009 28,405 9.5
2010 28,490 9.6
2011 28,765 9.8
2012 28,918 10.5
Source: ONS, Labour Force Survey datasets.
Notes: (a) Underemployed workers are those who are employed but who
either wish to work more hours in their current role or who are
looking for an additional job or for a replacement job which offers
more hours. They must also be over 16 and be currently working
under 40 hours per week if they are between 16 and 18 and under 48
hours if they are over 18. Finally, they must be able to start
working extra hours within the next two weeks. (b) This total
excludes those workers who have unknown underemployment status. (c)
This is calculated by dividing the total number of underemployed
workers by the total number of people in employment that have known
underemployment status.
Table 2. Wants longer hours at current basic rate given
the opportunity
Looking for More
a different hours # Extra Actual
job (%) (%) hours hours
All
2008 6.3 7.4 11.6 33.0
2009 4.9 9.1 11.7 32.6
2010 7.1 9.6 11.8 32.6
2011 7.2 9.6 12.0 32.5
2012 7.6 9.9 12.0 32.5
Full-timers
2008 5.5 4.9 9.4 38.0
2009 4.0 6.2 9.5 37.8
2010 5.7 6.4 9.4 37.9
2011 5.9 6.1 9.5 37.8
2012 6.1 6.3 9.5 37.9
Part-timers
2008 7.9 15.2 13.3 17.3
2009 6.9 17.6 13.4 17.1
2010 9.6 18.2 13.6 17.2
2011 9.8 19.4 13.8 17.2
2012 10.6 19.7 13.8 17.2
Self-employed
2008 4.1 7.9 13.0 37.4
2009 3.7 10.4 13.6 36.7
2010 4.8 10.6 13.1 36.5
2011 5.0 10.9 13.2 36.0
2012 5.3 11.3 13.4 35.6
Source: Labour Force Survey micro data (weighted by person
weights).
Notes: # extra hours is conditional on the respondent saying
they wanted more hours and the number was >0.
Table 3. Unemployment rate and underemployment
index, 2008-12
Underemployment index Unemployment rate
2008 2010 2012 2008 2010 2012
All 6.2 9.4 9.9 5.8 7.8 8.0
Youth
(age 16-24) 20.4 27.3 30.0 13.2 17.6 19.5
Prime age
(age 25-49) 4.8 7.8 8.1 4.2 6.3 6.2
Older
(age 50+) 1.0 3.2 3.5 3.2 4.6 4.6
Male 6.4 9.9 10.0 5.9 8.9 8.8
Female 6.3 9.1 10.2 5.0 6.9 7.7
White 5.4 8.5 8.9 5.7 7.9 7.5
Mixed 16.3 17.9 19.2 13.2 14.0 15.4
Asian or
Asian British 13.2 16.5 17.7 9.9 11.6 12.5
Black or
Black British 17.0 22.6 23.1 13.3 16.4 17.1
Chinese 9.7 8.8 16.7 7.4 8.2 10.7
Other ethnic
group 13.9 18.5 18.9 10.5 13.4 13.2
Northern 7.5 10.3 12.5 7.8 9.5 10.3
Yorks and
Humber 6.6 11.1 11.0 6.4 9.3 9.3
East Midlands 6.6 9.4 9.9 5.9 7.7 8.0
East 5.3 8.2 8.3 5.0 6.6 6.7
South East 6.1 9.0 9.4 4.4 6.2 6.4
South West 4.7 7.7 7.6 4.3 4.3 6.0
West Midlands 7.2 10.4 10.6 6.9 8.9 8.7
North West 7.7 9.7 11.3 6.9 8.2 9.0
Wales 6.8 10.2 11.3 6.3 8.7 8.6
Scotland 4.9 9.9 10.2 4.8 8.3 8.0
Northern
Ireland 4.2 8.5 8.6 4.4 6.9 7.4
Notes: No published unemployment rates for 2012 were available
for ethnic group. Our own estimates from the Labour Force
Survey have been substituted.
Table 4. Proportion of workers wanting extra hours
Full-timers Part-timers All
Total economy
2008 5.1 16.5 7.9
2009 6.4 18.9 9.6
2010 6.8 20.1 10.3
2011 6.5 21.5 10.4
2012 6.7 22.1 10.7
Private sector
2008 5.3 16.6 7.9
2009 6.9 19.6 9.9
2010 7.0 20.2 10.3
2011 6.7 22.3 10.6
2012 6.8 22.1 10.8
Public sector
2008 4.5 15.9 7.8
2009 5.0 17.1 8.4
2010 5.8 18.1 9.4
2011 5.6 19.1 9.5
2012 5.8 19.1 9.7
Source: Labour Force Surveys.
Table 5. Preferences over hours
Part-time prefer full-time
All workers Part-timers
Full-timers n/a n/a
Self-employed 0.0528 (33.40) 0.0013 (0.63)
Govt. training
scheme 0.0673 (1.53) 0.0402 (1.27)
Male -0.2848 (261.23) -0.1504 (75.60)
2009 -0.0039 (2.69) -0.0301 (12.58)
2010 -0.0016 (1.18) -0.0489 (21.12)
2011 -0.0076 (5.42) -0.0659 (27.83)
2012 -0.0093 (5.27) -0.0914 (29.41)
16-17 0.5345 (94.96) 0.0817 (25.70)
18-24 0.0193 (9.61) -0.0863 (26.81)
25-29 -0.0757 (41.20) -0.0544 (15.66)
30-34 -0.0247 (13.10) 0.0029 (0.99)
35-39 0.0120 (6.46) 0.0138 (5.15)
45-49 -0.0257 (14.85) -0.0209 (7.49)
50-54 -0.0247 (13.82) -0.0184 (6.48)
55-59 0.0233 (11.75) 0.0129 (4.74)
60-64 0.2079 (80.61) 0.0722 (29.85)
65-69 0.4885 (117.34) 0.1002 (39.18)
70+ 0.6349 (103.62) 0.1022 (33.22)
Mixed -0.0123 (2.23) -0.0304 (3.85)
Asian 0.0339 (13.70) -0.0326 (9.94)
Black -0.0108 (3.18) -0.0658 (12.73)
Chinese -0.0190 (2.69) -0.0580 (5.38)
Other race 0.0067 (1.51) -0.0808 (12.63)
No race -0.0405 (1.91) -0.0607 (1.68)
DDA disabled 0.0945 (46.22) 0.0161 (7.05)
Work limiting
disabled -0.0096 (5.22) -0.0062 (2.22)
Not disabled 0.0433 (15.47) -0.0245 (6.88)
No qualifications 0.0957 (5.61) -0.0331 (1.54)
Agriculture 0.0026 (0.52) 0.0262 (3.00)
Energy & water 0.0207 (3.90) 0.0333 (3.51)
Construction 0.0268 (8.65) -0.0432 (7.25)
Distribution & 0.2443 (93.37) -0.0227 (5.61)
hotels Transport
& communication 0.0887 (29.62) -0.0192 (3.83)
Banking & finance 0.1324 (50.87) -0.0162 (3.77)
Public admin, educ
& health 0.1703 (65.19) -0.0100 (2.39)
Other services 0.2235 (66.22) -0.0194 (4.15)
Rest Northern 0.0163 (3.83) -0.0058 (1.03)
region
South Yorkshire 0.0317 (6.74) 0.0183 (3.19)
West Yorkshire 0.0154 (3.78) 0.0270 (5.35)
Rest of Yorks &
Humberside 0.0438 (9.81) 0.0194 (3.62)
East Midlands 0.0233 (6.15) 0.0138 (2.88)
East Anglia 0.0351 (8.50) 0.0206 (4.09)
Central London -0.0699 (18.56) 0.0236 (3.97)
Inner London
(not central) -0.0230 (5.57) 0.0081 (1.41)
Outer London 0.0105 (2.65) 0.0109 (2.14)
Rest of South East 0.0378 (10.61) 0.0344 (7.93)
South West 0.0452 (11.87) 0.0258 (5.68)
West Midlands
Metrop 0.0000 (0.01) 0.0073 (1.38)
Rest of West
Midlands 0.0293 (7.21) 0.0130 (2.56)
Greater Manchester 0.0026 (0.65) 0.0136 (2.62)
Merseyside 0.0165 (3.49) 0.0139 (2.29)
Rest of North West 0.0164 (4.06) 0.0124 (2.40)
Wales 0.0119 (3.01) -0.0069 (1.29)
Strathclyde -0.0083 (2.03) -0.0139 (2.36)
Rest of Scotland 0.0202 (5.10) 0.0051 (0.98)
Northern Ireland -0.0167 (4.21) -0.0180 (3.06)
Outside UK -0.0910 (7.24) 0.0043 (0.17)
Public company, plc -0.0071 (2.14) 0.0154 (3.28)
Nationalised
industry etc -0.0272 (4.07) -0.0895 (7.43)
Central govt.,
civil service -0.0566 (21.04) 0.0552 (11.57)
Local govt. or 0.0117 (6.72) -0.0148 (6.09)
council
University, etc 0.0155 (4.41) -0.0083 (1.61)
Health authority
or NHS trust -0.0024 (1.15) 0.0297 (9.96)
Charity, voluntary
org, etc 0.0328 (11.62) -0.0093 (2.44)
Armed forces -0.1399 (19.89) 0.0271 (1.26)
Other kind of
organisation -0.0048 (0.96) -0.0259 (3.48)
Constant
Pseudo/Adjusted 0.2257 0.1283
[R.sup.2]
N 797,047 220,110
Number extra hours preferred
All workers Full-timers
Full-timers -2.8639 (230.31) n/a
Self-employed 0.4061 (25.89) 0.3125 (25.58)
Govt. training
scheme 1.4077 (3.03) -0.5121 (1.09)
Male 0.8255 (70.95) 0.2502 28.14)
2009 0.2199 (13.82) 0.1295 (10.42)
2010 0.3124 (20.49) 0.1574 (13.21)
2011 0.3746 (24.41) 0.1610 (13.42)
2012 0.4540 (23.50) 0.1767 (11.67)
16-17 -0.0432 (0.95) 0.1849 (2.80)
18-24 1.3702 (63.04) 0.4539 (26.32)
25-29 0.4789 (22.55) 0.2359 (14.85)
30-34 0.1079 (5.26) 0.1125 (7.23)
35-39 -0.0127 (0.65) 0.0576 (3.83)
45-49 -0.0223 (1.18) -0.0383 (2.65)
50-54 -0.1948 (9.93) -0.1358 (9.06)
55-59 -0.5266 (25.23) -0.2154 (13.31)
60-64 -1.2350 (52.03) -0.3984 (20.40)
65-69 -2.1545 (59.66) -0.5331 (14.02)
70+ -2.6909 (51.36) -0.6391 (9.08)
Mixed 0.4968 (8.00) 0.1756 (3.59)
Asian 0.7643 (30.15) 0.4674 (23.71)
Black 1.4139 (37.81) 0.8540 (29.51)
Chinese 0.5097 (6.54) 0.1496 (2.49)
Other race 0.7993 (17.21) 0.4295 (11.91)
No race 1.6456 (6.92) 0.8212 (4.48)
DDA disabled 0.2703 (12.59) 0.1814 (9.88)
Work limiting
disabled 0.1426 (6.92) 0.0832 (5.10)
Not disabled 0.3555 (12.02) 0.1282 (5.28)
No qualifications 0.6918 (4.53) 0.3802 (3.31)
Agriculture -0.2584 (5.41) -0.3125 (8.92)
Energy & water -0.1859 (4.56) -0.1218 (4.29)
Construction -0.0147 (0.61) 0.0535 (3.14)
Distribution & 0.4081 (20.40) 0.1221 (8.15)
hotels Transport
& communication 0.1007 (4.31) 0.0116 (0.70)
Banking & finance 0.0855 (4.13) 0.0144 (0.95)
Public admin, educ
& health 0.2058 (8.88) 0.1807 (0.12)
Other services 0.3363 (12.25) 0.1464 (6.68)
Rest Northern 0.0478 (1.08) 0.0305 (0.88)
region
South Yorkshire 0.0492 (1.01) 0.1305 (3.42)
West Yorkshire -0.0133 (0.31) 0.0542 (1.63)
Rest of Yorks &
Humberside -0.0498 (1.10) 0.0732 (2.06)
East Midlands 0.0860 (2.19) 0.0814 (2.65)
East Anglia 0.0591 (1.40) 0.0643 (1.94)
Central London -0.2149 (4.96) -0.1005 (3.07)
Inner London
(not central) 0.0510 (1.12) 0.0422 (1.21)
Outer London 0.1316 (3.15) 0.0903 (2.77)
Rest of South East -0.0367 (1.00) 0.0625 (2.18)
South West 0.0023 (0.06) 0.1180 (3.90)
West Midlands
Metrop -0.0619 (1.45) -0.0203 (0.61)
Rest of West
Midlands -0.0397 (0.95) -0.0066 (0.20)
Greater Manchester 0.0139 (0.33) 0.0456 (1.39)
Merseyside -0.0539 (1.08) -0.0187 (0.48)
Rest of North West 0.0022 (0.05) 0.0364 (1.10)
Wales 0.0526 (1.26) 0.0732 (2.24)
Strathclyde 0.1660 (3.76) 0.0662 (1.93)
Rest of Scotland 0.0076 (0.18) 0.0107 (0.33)
Northern Ireland -0.3256 (7.55) -0.2027 (6.08)
Outside UK -0.4667 (4.36) -0.2893 (3.89)
Public company, plc -0.1006 (2.95) -0.0418 (1.62)
Nationalised
industry etc 0.1501 (2.38) 0.0584 (1.28)
Central govt.,
civil service -0.3025 (9.57) -0.2181 (9.16)
Local govt. or 0.0905 (4.53) -0.0295 (1.79)
council
University, etc 0.0149 (0.38) -0.1068 (3.38)
Health authority
or NHS trust -0.3961 (15.72) -0.1854 (8.91)
Charity, voluntary
org, etc 0.0881 (2.73) -0.0103 (0.37)
Armed forces -0.7449 (10.93) -0.6348 (3.54)
Other kind of
organisation 0.0739 (1.33) -0.1142 (2.56)
Constant 1.8970 -0.1603
Pseudo/Adjusted 0.1018 0.0171
[R.sup.2]
N 766,174 551,515
Number extra
hours preferred
Part-timers
Full-timers n/a
Self-employed 0.5119 (10.94)
Govt. training
scheme 1.0412 (1.08)
Male 2.7083 (71.68)
2009 0.4129 (8.95)
2010 0.6502 (14.72)
2011 0.8665 (19.46)
2012 1.0748 (19.35)
16-17 -0.5805 (6.64)
18-24 2.5711 (40.52)
25-29 10.1230 (15.59)
30-34 -0.0061 (0.09)
35-39 -0.2077 (3.49)
45-49 -0.0446 (0.76)
50-54 -0.5574 (9.20)
55-59 -1.6299 (26.32)
60-64 -2.9799 (47.03)
65-69 -3.9311 (50.96)
70+ -4.4403 (44.95)
Mixed 0.8638 (4.89)
Asian 0.9210 (12.27)
Black 2.3009 (20.57)
Chinese 1.2459 (5.34)
Other race 1.2364 (9.02)
No race 4.0378 (5.64)
DDA disabled 0.2119 (4.06)
Work limiting
disabled 0.1492 (2.57)
Not disabled 0.6932 (9.01)
No qualifications 1.9410 (3.88)
Agriculture -0.6202 (3.46)
Energy & water -0.5510 (2.60)
Construction 0.2790 (2.42)
Distribution & 0.4968 (6.06)
hotels Transport
& communication 0.3693 (3.61)
Banking & finance 0.1852 (2.15)
Public admin, educ
& health 0.1466 (1.69)
Other services 0.4591 (4.91)
Rest Northern 0.1881 (1.46)
region
South Yorkshire -0.0274 (0.20)
West Yorkshire -0.1590 (1.26)
Rest of Yorks &
Humberside -0.1438 (1.12)
East Midlands 0.2262 (1.98)
East Anglia 0.2165 (1.78)
Central London -0.5505 (3.68)
Inner London
(not central) 0.1096 (0.79)
Outer London 0.3635 (2.98)
Rest of South East -0.0808 (0.75)
South West -0.0749 (0.67)
West Midlands
Metrop -0.0736 (0.58)
Rest of West
Midlands 0.0319 (0.26)
Greater Manchester -0.0418 (0.33)
Merseyside -0.1232 (0.85)
Rest of North West 0.0260 (0.21)
Wales 0.0596 (0.49)
Strathclyde 0.4471 (3.42)
Rest of Scotland 0.0933 (0.78)
Northern Ireland -0.6048 (4.70)
Outside UK -1.4671 (2.20)
Public company, plc -0.3884 (3.58)
Nationalised
industry etc 0.6240 (2.56)
Central govt.,
civil service -1.0172 (9.50)
Local govt. or 0.2989 (5.80)
council
University, etc 0.0385 (0.35)
Health authority
or NHS trust -0.7800 (12.02)
Charity, voluntary
org, etc 0.2560 (3.23)
Armed forces 0.7162 (1.42)
Other kind of
organisation 0.4763 (3.11)
Constant 0.4207
Pseudo/Adjusted 0.1016
[R.sup.2]
N 214,659
Source: Labour Force Surveys, 2008-12.
Notes: Excludes 4025 cases that said they would prefer less hours
(lespay). Equations include 66 highest qualification dummies and 11
month dummies--results not reported. Region is defined as region
where the individual works. Sample is of workers only. Column
1=dprobit, column 2=0LS. Additional excluded categories, private
sector, manufacturing and higher education. T-statistics in
parentheses.
