We document that fluctuations in part-time employment play a major role in movements in hours per worker during cyclical swings in the labor market. Building on this result, we develop a stock-flow framework to describe the dynamics of part-time employment. The evolution of part-time employment is predominantly explained by cyclical changes in transitions between full-time and part-time employment. Those transitions occur overwhelmingly at the same employer, entail sizable changes in individuals’ working hours and are associated with an increase in involuntary part-time work. Our findings provide a novel understanding of the cyclical dynamics of labor adjustment on the intensive margin.

 

This Working Paper was published in the American Economic Journal: Macroeconomics.
Read the article on the American Economic Association website



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