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Underemployment and the Lack of Wage Pressure in the UK

Published online by Cambridge University Press:  01 January 2020

David N.F. Bell  and
David G. Blanchflower
David N.F. Bell*
Affiliation:
Division of Economics, Stirling Management School, University of Stirling, IZA and CPC
David G. Blanchflower
Affiliation:
Bruce V. Rauner Professor of Economics, Department of Economics, Dartmouth College, Division of Economics, Stirling Management School, Bloomberg, IZA and NBER
*
E-mail: d.n.f.bell@stir.ac.uk
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Abstract

In this note, we focus on underemployment as a potential cause of lower wage growth, which itself may have deeper causes, but which has, we would argue, demonstrably changed since the 2008 recession. The gap between our measures of the number of additional hours required by those who want more hours and the number who want less has narrowed recently. Neither have returned to their pre-recession levels. In our view, underemployment remains a major factor in explaining the 2 per cent wage norm that continues to exist in the UK.

Keywords

unemploymentunderemploymentwage inflationhoursanchoringheuristicsJ31J42J22E31
Type
Notes and Contributions
Information
National Institute Economic Review , Volume 243 , February 2018 , pp. R53 - R61
Copyright
Copyright © 2018 National Institute of Economic and Social Research

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Footnotes

We thank NIESR Director Jagjit Chadha and Amit Kara for helpful comments.

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