Prelude to a RIF: older workers, part-time hours, and unemployment

Since the beginning of the most recent recession in December 2007, involuntary part-time employment (part-time for economic reasons) in the United States has increased from 4.2 million workers to 9.1 million, more than doubling. In this paper, we examine whether such increases in involuntary part-time employment have helped combat unemployment in the past or placed a disproportionate burden on older workers. Using Current Population Survey (outgoing rotation group) data from 1983 to 2002, we find that increases in involuntary part-time work in an industry raise the industry unemployment rate. Furthermore, the connection between rising rates of involuntary part-time work and unemployment is stronger among older workers than among younger workers. We conclude that reducing work hours through the use of part-time work does not ameliorate the effects of recessions on workers. Rather, it is a harbinger of unemployment, especially among those older than 55.