UNDEREMPLOYMENT IN THE UK IN THE GREAT RECESSION

• Published in: National Institute economic review Vol. 215; no. 215; pp. R23 - R33
• Main Authors: Bell, David N.F., Blanchflower, David G.
• Format: Journal Article
• Language: English
• Published: London, England SAGE Publications 01-01-2011; Sage Publications Ltd. (UK); Cambridge University Press
• Subjects: African American education; Age groups; Economic recessions; Employee qualifications; Employers; Employment; Forecasts and trends; Great Recession; Labor force participation; Labor market; Labor markets; Recessions; Self employment; Studies; Underemployment; Unemployment; United Kingdom; Work; Workers; Workforce; Working hours; Young adults; United Kingdom; United Kingdom > UK; underemployment; Unemployment
• ISSN: 0027-9501; 1741-3036
• DOI: 10.1177/0027950111401141

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