Underemployment and the lack of wage pressure in the UK (Notes and Contributions, National Institute Economic Review February 2018)

| Publication date: 7 Feb 2018 | Theme: Macroeconomics, Employment & Social policy | External Author(s): Bell, D N F, Blanchflower, D G | JEL Classification: J31, J42, J22, E31 | Journal: National Institute Economic Review Issue 243 | Publisher: Sage Publications, London

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.

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Keyword tags: 
unemployment
underemployment
wage inflation
hours
anchoring
heuristics