Overemployed Workers in the U.S. Labor Market

Abstract

The article estimates the current rate and distribution of “overemployment”— workers expressing a willingness to decrease hours of work at their job even if it means lower income. I explore the theoretical causes determining the level and trend of overemployment and consider measurement issues. The May 2001 Current Population Survey (CPS) Supplement indicates an overemployment rate under 7 percent among full-time workers. However, the rate is measurably higher among women, whites, parents of young children, workers with long workweeks, occupational classifications like managers/ administrators, scientists, engineers, and some technicians, and in industries such as health care, utilities, and transportation. I then draw implications for refining Fair Labor Standards Act reforms.