Cutting hours for overemployed may boost well-being, job opportunities for others

Lonnie Golden, associate professor of economics at Penn State's Abington Campus in greater Philadelphia, said empowering the 7 percent of workers who claimed in a 2001 U.S. Current Population Survey that they would like to cut back on their hours and income to do so, might create some work and income for the 23 percent of the work force that is underemployed—those who would like more work and income—as well as the unemployed. It would also free up time for the overemployed to pursue endeavors other than work, which could lead to improved work-life balance and quality of life.

“The unemployment rate is under 5 percent now, which is pretty good. However, if 7 percent of the workforce feels as if they are working more hours than they would like, and some folks have no jobs or are seeking more work hours, then something is not functioning as well as it could in the labor market,” he said. “It would benefit all employees if they could work closer to the amount of hours they desire, and in the long run, it would likely be beneficial for employers as well, in terms of greater efficiency and employee retention.”

The 7 percent overemployment figure varies greatly among different industries, though the overall figure remains virtually unchanged compared to when last measured by the Labor Department in 1985.

For example, employees in the utilities and sanitary services industries and in hospitals were among those reporting the highest levels of overemployment, with each at 11 percent. At the other end of the spectrum are industries such as construction, with overemployment rates around 4 percent but very high rates of underemployment.

Golden and co-author Tesfayi Gebreselassie, former Penn State graduate economics student, will publish their findings in “Overemployment and Underemployment Mismatches in the U.S. Work Force: The Preference to Exchange Income for Fewer Work Hours,” in the U.S. Department of Labor's Monthly Labor Review in April.

Workers in jobs that demand more than a typical 40-hour and especially 50-hour work weeks are more likely to feel overemployed, whereas those employed in industries where work is more seasonal or dependent on external factors are more likely to seek additional hours, the authors note.

Gender was also a factor, as 10.1 percent of women claimed a desire to cut back on work time even for less pay, nearly double the 5.6 percent of men seeking less time at work. Golden noted that part of this may be dependent on family characteristics. Women with newborns, for example, may feel like they need to spend more time at home with their children, both for personal reasons and due to societal expectations.

“People in certain stages of their life cycle have different preferences and constraints when it comes to work hours, non-work time and income needs,” he said. “People with young children are more likely to want to spend more time at home than those who are unmarried and who don't have children. On the other hand, men who strongly identify with the societal expectations of 'men as providers' are more likely to express a need for hours, especially as their children get older.”