The Shadow Margins of Labor Market Slack / R. Jason Faberman, Andreas I. Mueller, Ayşegül Şahin, Giorgio Topa.

Format:

Book

Author/Creator:

Faberman, R. Jason.

Contributor:

National Bureau of Economic Research.

Mueller, Andreas I.

Şahin, Ayşegül.

Topa, Giorgio.

Series:

Working Paper Series (National Bureau of Economic Research) no. w26852.

NBER working paper series no. w26852

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

We use a mix of new and existing data to develop the Aggregate Hours Gap (AHG), a novel measure of labor market underutilization. Our measure differentiates individuals by detailed categories of labor market participation and uses data on their desired work hours as a measure of their potential labor supply. We show that desired hours vary widely by demographics and detailed labor force status, and that the gap between desired and actual work hours is strongly positively correlated with reported search effort. The Aggregate Hours Gap suggests a more sluggish labor market recovery since the Great Recession than either the official unemployment rate or alternative measures of labor market underutilization. Modest amounts of underutilization among the part-time employed and a substantial degree of underutilization among those out of the labor force account for the disparity. The Aggregate Hours Gap also does well in accounting for wage movements over our sample period.

Notes:

Print version record

March 2020.