This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.Find out more here


To discuss how you and your organisation can get more involved with The Work Foundation, please contact us.

Call 020 7976 3575 or email


Professor Geraint Johnes
Professor of Economics at Lancaster University
T 020 7976 3516
Professor Geraint Johnes

The latest quarterly data from the Bell-Blanchflower underemployment index

Authors: Professor Geraint Johnes

13 November 2014

The Labour Force Survey for the second quarter of 2014 is now available and allows computation of the Bell-Blanchflower underemployment measure for this period. The time series for this variable, along with comparable data for the unemployment rate, is given in the table and graph below. In these data, the underemployment rate is directly comparable to the unemployment rate – it adds to the unemployment rate the full-time equivalent net effect of hours that workers would like to work but cannot. Since the second quarter of 2007, the underemployment rate has been persistently above the unemployment rate. The gap widened quickly, and by the end of 2009 was almost 2 percentage points. It remained stubbornly at about this level – although it has reduced slightly over recent quarters.

The gap between the underemployment rate and the unemployment rate is important. It represents slack that still exists in the labour market despite the impression that might be given by a relatively low rate of unemployment. People who are in part-time work and who want to increase their hours of work can, as the economy recovers, switch to full-time work. The most recent evidence suggests that an increasing proportion of the new jobs that are being created are full-time. If this trend continues, then we should expect the gap between the unemployment rate and the underemployment rate to narrow, and the unemployment rate will once again become an appropriate measure of labour market slack. In the meantime, there is still reason to suppose that unemployment can fall further without adding substantively to wage pressure.

The overall economic situation is evolving quickly, but there would appear, on the basis of the evidence presented here, to be little reason to countenance a tightening of policy over the coming few months. The international evidence suggests that the UK has been quite unusual in the extent of underemployment. Data from Eurostat indicate that – aside from Spain, Cyprus and Ireland, the UK is the country with the highest incidence of part-time workers who are underemployed. The reasons for this are as yet not well understood, but what is clear is that the old models in which the unemployment rate alone sufficed as a measure of labour market tightness are no longer adequate.

View the full datalab here