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In the Nation's Interest

Why are there more (of some) part-time workers? And what do women (and even men) have to do with it?

The number of people working “part time for economic reasons” has continued to fall, according to the Bureau of Labor Statistics’ most recent employment report (for April 2015), as shown in the chart above. This is an encouraging sign of the continuing economic recovery.  In fact, the broadest “U-6” measure of unemployment, or what BLS calls “labor underutilization”, has fallen from 12.3 percent last April to 10.8 percent this April.

This is all good news, but it made me wonder about the trends in the number of people working part time for so-called “noneconomic” reasons, which has been growing in the U.S. for decades.  What I learned is that there may be some interesting gender and generational shifts occurring among the increasing number of Americans working part time for these noneconomic reasons.

First, what’s the difference between “economic” and “noneconomic” reasons for part-time work?

“Part time for economic reasons” is defined in the BLS’s technical notes on the household survey this way (emphasis added):

Sometimes referred to as involuntary part time, this category refers to individuals who gave an economic reason for working 1 to 34 hours during the reference week. Economic reasons include slack work or unfavorable business conditions, inability to find full-time work, and seasonal declines in demand. Those who usually work part time must also indicate that they want and are available for full-time work to be classified as on part time for economic reasons.

Because the constraints described are more driven by the demand side of the labor market and business-cycle influences on that demand, it’s not surprising that the movement of “part time for economic reasons” employment follows a strong cyclical pattern—rising in recessions, and shrinking in recoveries.  The number and share of people working only part time for economic reasons rose dramatically in the Great Recession and although recovering over the past several years (since immediately after the official recession), apparently has a ways to go before returning to pre-recession levels.

But people also work part time for “noneconomic” reasons related to their life situations.

The BLS defines “noneconomic” reasons for part-time work as follows (again from BLS’s technical notes and again, emphasis added):

This group includes those persons who usually work part time and were at work 1 to 34 hours during the reference week for a noneconomic reason. Noneconomic reasons include, for example: Illness or other medical limitations, childcare problems or other family or personal obligations, school or training, retirement or Social Security limits on earnings, and being in a job where full-time work is less than 35 hours. The group also includes those who gave an economic reason for usually working 1 to 34 hours but said they do not want to work full time or are unavailable for such work.

Ironically, some of these reasons called “noneconomic” really get to the core of a person’s fundamental economic decisions and their own tradeoffs between time and money:  how their potential value to the labor market as a full-time worker compares with the value they themselves place on the alternative uses of their time—for example, more time for childcare or leisure activities—that a part-time work schedule allows.

So it seems that the different reasons for working part time, however labeled, may be associated with different economic factors—some more cyclical and demand-side driven (depending on shorter-to-medium-term business conditions), and others following a more stable, longer-term trend driven by the fundamental economic decisions that households make, reflecting their more personal circumstances.

We can see how the different reasons for part-time work move differently over time in the chart below, which decomposes the full category of part time “for economic reasons” into the more specific “economic” reasons and also shows the (much larger) population who choose to work part time for the “noneconomic” reasons.  (And just a quick note, that for ease of reading, I am going to stop putting quotation marks around every occurrence of the economic and noneconomic labels for the remainder of this post.)

Moving from the top down, the top line shows the number of noneconomic part-time workers, the second line shows all part-time workers for economic reasons, and the bottom two lines show the economic part-time workers due to “slack work or business conditions” and those who “could only find part-time work,” respectively.  From this chart it’s clear that the number of noneconomic part-time workers has been rising fairly continuously over the past 60 years with little cyclical movement (although through the Great Recession this number did fall, counter to its typical upward trend).  It’s been back on an upward track since 2010, but has not quite caught up to pre-Great-Recession levels.  The chart also indicates that the one economic reason for working part time that does not sound completely business-cycle driven, “could only find part-time work,” also is the part of economic part-time employment that exhibits the least cyclicality.

OK, so you might be thinking that the number of people working part time for noneconomic reasons has been rising steadily over time just because the number of people rises steadily over time.  But even controlling for population growth (in the chart below), we can see that noneconomic part-time employment is less cyclical than economic part-time employment—and that noneconomic part time workers as a share of the population are still on a generally (but less sharply) rising path over the past decades.  In the 1950s, just around 5 percent of the population was working part time for these noneconomic reasons, but by the 1990s this share reached over 9 percent; today it is around 8 percent and rising (again).  (In the chart, the noneconomic part-time workers as share of population are shown in the middle line, the economic part-time workers as share of population in the bottom line, and all part-time workers as share of population in the top line.)

So why is the rise in part-time-for-noneconomic-reasons employment a long-term trend in the U.S.?  Let’s take a look at the changing demographics of the workforce for a possible explanation.  The next chart shows the trends in labor force participation rates (the share of the total population “in” the labor market whether they hold a job or are just looking for a job) for a few key demographic groups:  from the top of the right side down, these are prime-age workers, overall population, women, older workers, and then teens.  Of all these subgroups, the one that corresponds most closely to the general pattern of noneconomic part-time employment seems to be female labor force participation—which has shown the steadiest rise since the 1950s and has driven the overall labor force participation rate, even recently when overall participation has slowed and even declined.

So pursuing this clue, in the next chart I plot part-time workers who work part time for noneconomic reasons (as a share of the total workforce) against the female labor force participation rate.  And, lo and behold, in the “big picture” view over the past six decades, the women’s labor force participation story seems to explain or at least be well correlated with the trend in part-time, noneconomic work.  More women in the labor force has meant more part-time jobs (for those so-called “noneconomic” reasons):

But look at what happens when we zoom into the most recent period from 2000 to the present.  The correlation between these two series is distinctly different (and I don’t even need to run a regression to show you):

Since approximately 2010, female labor force participation has been falling, while the share of the workforce working part time for noneconomic reasons has been rising (and resuming the longer-term upward trend).  What’s going on?  It can no longer be explained as solely a women’s story; it must be that men’s labor market choices are part of the story, too, at least most recently.  It could be a reflection of the fact that the younger generations of men are sharing in more responsibilities at home (yay!); the Pew Research Center has documented this convergence of work-life roles between men and women.  It’s also likely capturing the shift in the economy to more service-providing and tech-sector industries and hence jobs, which are more likely to be part time than are jobs in the more traditional “old-school,” goods-producing industries.

So, what have we learned from these charts?  Even a tried-and-true economic indicator like part-time employment tells us much more than only one story about one kind of economic fluctuation or journey.  This quick dive into more details about part-time employment (alone!) suggests that the labor market and the economy as a whole are ever-changing—not just because we’re always somewhere on the roller coaster of the business cycle, but also because our economy is always changing and evolving in more profound and enduring ways, toward a “new” (and really just “the next”) normal.