The Labor Demand Side of Involuntary Part-Time Employment

Involuntary part-time employment is a measure of labor market slack that goes beyond the unemployment rate, and broadens our understanding of the state of the labor market. Our study investigates the determinants of the involuntary part-time employment share (i.e., the proportion of involuntary part-time workers in all employment) by accounting for both labor supply (unemployment) and labor demand (job vacancies). We use big data on the near universe of online job vacancies collected by Lightcast and the Current Population Survey from 2003 to 2021. We find that, within a commuting zone by Census occupation cell, a 10% increase in the unemployment rate increases the involuntary part-time share by 0.19 percentage points, while a 10% increase in job vacancies decreases the involuntary part-time share by 0.07 percentage points. We also provide suggestive evidence that higher labor market concentration, which is indicative of greater labor market power, may raise involuntary part-time employment. Overall, we conclude that higher labor supply and lower labor demand increase involuntary part-time employment.