The rise of part -time employment in the great recession: Its causes and macroeconomic effects
- Authors
- Kang, Hyunju; Park, Jaevin; Suh, Hyunduk
- Issue Date
- Dec-2020
- Publisher
- ELSEVIER
- Keywords
- Part-time labor; Great recession; Unemployment; New keynesian model
- Citation
- JOURNAL OF MACROECONOMICS, v.66
- Journal Title
- JOURNAL OF MACROECONOMICS
- Volume
- 66
- URI
- http://scholarworks.bwise.kr/ssu/handle/2018.sw.ssu/40926
- DOI
- 10.1016/j.jmacro.2020.103257
- ISSN
- 0164-0704
- Abstract
- During the Great Recession, the U.S. economy witnessed a substantial rise in part-time employment for a sustained period. We extend the New Keynesian unemployment model by Gali et al. (2012) to allow substitutions between full-time and part-time labor, and estimate the model's parameters by using the Bayesian method. In our model, households and firms can optimally allocate full-time and part-time labor, and disturbances exist in part-time labor supply (household disutility from part-time labor) and part-time labor demand (firms' efficiency to use part-time labor). As for the Great Recession, the initial increase in part-time employment at the outset of the financial crisis is mostly explained by the rise of the risk premia; the persistently high level of part-time employment in the later period is mainly explained by an exogenous increase in part time labor supply. A part-time labor supply shock also explains a significant portion of slow recovery in the gross wage during the recession, as the shock lowers the part-time wage and the proportion of full-time workers in total employment. Notably, the results from our model suggest that though the transition from full-time to part-time jobs contributed to mitigating the sharp contraction in total employment and labor force during the Great Recession, it played only a limited role in relieving recessionary pressure.
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Collections - College of Economics and International Commerce > Department of Economics > 1. Journal Articles
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