‘Involuntary’ part-time workers Chris Cousins DWP November 2012

Introduction ‘Involuntary’ in this presentation describes people who report in the Labour Force Survey that they took a part-time job because they could not find a full-time job. It is not an official term and it is debatable how many are genuinely involuntary – but used here for shorthand. Analysis presented here to shed more light on the topic … not a complete assessment or an official DWP view.

Outline Why are we interested in involuntary part-time workers? How much do they want to be full-time? Which groups drive the trends? Which flows drive the trends?

Outline Why are we interested in involuntary part-time workers? How much do they want to be full-time? Which groups drive the trends? Which flows drive the trends?

Permanent and temporary employees (000s) Permanent (LHS) Temporary (RHS) Full and part-time employment (000s) Full-time (LHS) Part-time (RHS) Rising part-time employment since 2008 has partly offset the fall in full-time work. The number of permanent employees has fallen sharply since 2008, while temporary employment has shown a gradual rise. These trends are associated with a rise in those in a sub-optimal job. 1.4 million (18%) of part-time workers say they’d prefer a full-time job, up from 700,000 (9%) before the recession. 650,000 (41%) of temporary workers would prefer a permanent post up from 350,000 (25%) in Patterns of work Involuntary part-time and temporary workers (% of all workers of that type) Involuntary part-time Involuntary temporary

The rise in part-time work since 2008 has been entirely driven by those who couldn’t find a full-time job Reasons for part-time working (000s) The increase in part-time employment between 1993 and 2004 was driven by those choosing to be part- time, mainly students or those who did not want a full-time job. Those working part-time because they could not find a full-time job peaked at 850,000 (14%) in 1994 and fell to 550,000 (7.5%) in The increase since 2008 has been driven entirely by people who could not find a full-time job – up from 700,000 (10%) to 1.4 million (18%) currently.

Why are we interested in involuntary part-time workers? Summary A rise in part-time working has been a key feature of the labour market since recession This appears to be driven by ‘involuntary’ part-time workers But we know little about who they are or their behaviour

Outline Why are we interested in involuntary part-time workers? How much do they want to be full-time? Which groups drive the trends? Which flows drive the trends?

Involuntary part-time workers want more hours mostly in their current job 250,000 (21%) are looking for an alternative job with more hours and 85,000 (7%) for an additional job. 500,000 (40%) want more hours in their current job. But 370,000 (30%) say they don’t want more hours. Involuntary part-time workers by job search and hours preference (000s)

Don’t want more hours: 4.6m Voluntary Part-time 19.2m Full-time People who could not find a full-time job at the time do not necessarily want more hours now Around a third of ‘involuntary’ part-time workers did not more hours when interviewed, presumably because their circumstances or aspirations have changed since they got their current job. Only a quarter of those who want more hours (part-time and full-time) are ‘involuntary’ part-time workers. So ‘involuntary’ part-time work is not an accurate (or contemporary) measure of ‘under-employment’. Part-time status by whether want more hours (Q4 2011) Involuntary Part-time Want more hours 0.4m 0.9m2.7m

Those who want more hours generally want to become full-time rather than increase their hours slightly. This includes those who were not looking, but those who were looking had worked slightly lower hours and wanted slightly more. The pattern was similar for voluntary part-time workers, although they generally worked and wanted fewer hours (and those who don’t want more dominate the voluntary group. Involuntary part-time workers want a lot more hours Average weekly hours worked and wanted by preference and job search

Those who don’t want more hours are working around three hours fewer than before. Among those who want more hours, hours already worked are have increased slightly for those looking and decrease slightly for those not looking. For both those groups, aspirations for total hours are slightly lower than before the recession. No dramatic change in hours wanted since the recession Average weekly hours worked and wanted by preference and job search

The average hours wanted might be masking some extreme cases, but the distribution shows that most want between 6 and 30 hours. The numbers of involuntary part-time workers are not being boosted by large numbers of people wanting just a few more hours. The average extra hours wanted is not being boosted by large numbers wanting very high hours. Most want substantial numbers of extra hours Distribution of average weekly hours wanted by preference and job search

15% of involuntary part-time workers who did not want more hours had a second job. This is higher than other part-time workers, and has increased slightly from 13% since the recession, but has had a limited influence on the overall growth in involuntary part-time workers. The figures previously shown for average hours already worked include second jobs. Second jobs explain a relatively small part of involuntary part-time workers who don’t want more hours People with second jobs by preference and job search

How much do they want to be full-time? Summary Involuntary part-time is not the same as ‘under-employment’ Around 30% no longer want extra hours The remainder want substantial increases in hours to FT But only 30% of the total are actively looking Measure can reflect attitudes as much as job changes

Outline Why are we interested in involuntary part-time workers? How much do they want to be full-time? Which groups drive the trends? Which flows drive the trends?

Similar levels for men and women Involuntary part-time work by gender (000s) The current recession has seen a significant rise in involuntary part-time working for both men and women, which remain at similar levels. This contrasts with the peak following the 1990s recession, where women made up more than two-thirds of the total.

Involuntary part-time work – who they are not Some groups saw faster percentage increases than others, but the overall rise in involuntary part-time work was mainly driven by the groups that were already the largest … … those who are not disabled, not students, employees and not lone parents. Contribution to absolute rise in Involuntary part-time workers (000s) DDA disability Education Employment Family type

Involuntary part-time work by age Apart from 16-19s, all age groups have seen the number of part-time workers who couldn’t find a full- time job roughly double since Over half of the absolute increase in involuntary part-time workers came from the age group. Involuntary part-time workers by age (000s)

Involuntary part-time work by socio-economic group There have been above average percentage increases for intermediate occupations and small employers/self-employed and below average for higher managers and lower supervisory occupations. The majority of the absolute rise has been in routine and semi-routine occupations. Involuntary part-time workers by socio-economic group (000s)

Involuntary part-time work by industry Above average increases seen in construction and in banking, finance and insurance. Over half of the absolute increase was among the industries that already had the largest numbers – distribution, hotels and restaurants, and public administration, education and health. Involuntary part-time workers by industry (000s)

Involuntary part-time work by region The absolute rise has been shared across the regions, although there were above average percentage increases in East of England, North East and Northern Ireland. Involuntary part-time workers by region (000s)

Involuntary part-time work by age of youngest child Most groups have seen a similar percentage increase – 70-80% - but in absolute terms the majority has come from those without children. Involuntary part-time workers by household type (000s)

Involuntary part-time work by job tenure Total increase reflected across all durations, even 20+ years, so not just caused by inflows. Those already in work might become involuntary PT if hours are reduced or due to external factors. There may be fewer people with long durations flowing out of involuntary PT. Involuntary part-time workers by job tenure (000s)

Which groups drive the trends? Summary Broad-based increase Driven mainly by groups that already dominated the involuntary part-time group

Outline Why are we interested in involuntary part-time workers? How much do they want to be full-time? Which groups drive the trends? Which flows drive the trends?

Inflows to involuntary part-time work rose sharply from 2008, before levelling out… Rise in inflows driven by those people moving from full- to part-time in the same job, existing part-time workers who become involuntary (either due to changes in hours or attitude) and people coming from unemployment. The latter mainly reflects higher unemployment rather than a higher propensity to take a part-time job. Inflows to involuntary part-time work – rolling 4-quarter average (000s)

…higher inflows have driven a rise in the absolute number leaving involuntary part-time work… Most categories have seen a rise in the absolute number of people leaving involuntary part-time work since But outflows have failed to keep pace with inflows. Outflows from involuntary part-time work – rolling 4-quarter average (000s)

…although the rate at which people leave involuntary part-time work has fallen back It is also taking longer for people to leave involuntary part-time work, whether looking to increase hours, or become full-time, in their current job and those looking to find a better job match by changing jobs. Still a lot of turnover – about 25% of the stock leaves each quarter (down from a third pre-recession). 18% are in a positive direction: moving jobs, increasing hours in the same job or deciding they no longer want to increase their hours (down from 25% pre-recession). Outflow rate from involuntary part-time work – rolling 4-quarter average (%)

Net change in involuntary part-time work Unemployment – consistent net inflows from unemployment, which have risen since Part-time work (same job) – broad balance pre-2008 became net inflows thereafter as inflows rose and outflow rate fell. Full-time work (same job) – net outflows pre-2008 became net inflows in as inflows rose and outflow rate fell. Since eased but not back to the pre-recession position. Net change in involuntary part-time work – rolling 4-quarter average (000s)

With inflows still above outflows, involuntary part-time working is set to continue rising for now There are signs that inflows are levelling off, though the gap between inflows and outflows remains, suggesting that the number of involuntary part-time workers will continue rising in the short-term. Although it may take time, once a sustained economic recovery takes hold, we might expect the level to improve for the same reasons it rose: inflows, including those from unemployment, will fall back and outflow rates will pick up as people begin to find it easier to agree an increase in hours in their current job or to move to a new job offering longer hours. Inflows to and outflows from involuntary part-time work – rolling 4-quarter average (000s)

Which flows drive the trends? Summary Greater inflows from unemployment (second choice jobs?) and from the same job (reduced hours or change in attitude) Less opportunity to improve situation in the same job

Conclusions The increase in part-time work since the recession has been driven mainly by ‘involuntary’ part-time workers But this group includes people who no longer want more hours or are not looking The increase was broad-based More people in unemployment to take involuntary part-time jobs, but taking longer for some to progress in the same job Attitudes and perceptions are likely to be factors

Questions?