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Beyond BLS

Beyond BLS briefly summarizes articles, reports, working papers, and other works published outside BLS on broad topics of interest to MLR readers.

February 2023

Trends in employment and hours worked

Summary written by: William S. Shawhan

Maintaining a good work-life balance has many benefits. In “Where are the workers? From Great Resignation to Quiet Quitting” (National Bureau of Economic Research, Working Paper 30833, January 2023), Dain Lee, Jinhyeok Park, and Yongseok Shin investigate why U.S. employers are having an even harder time filling vacancies than expected with the current historically low unemployment rate. To better understand the labor market during the “Great Resignation” in 2021 and “Quiet Quitting” in 2022 in which many people worked fewer hours, the authors examine labor force trends that occurred from January 2007 to November 2022.

Using data from the BLS Current Population Survey, Lee, Park, and Shin estimate how annual aggregate hours worked in the United States changed over three periods. They find that per capita aggregate hours worked decreased 16 hours per year on average from 2007 to 2013, increased 9 hours per year on average from 2013 to 2019, and decreased 11 hours per year on average from 2019 to 2022. They categorize these changes into “extensive margin” changes and “intensive margin” changes. Extensive margin changes happen when workers enter or exit the labor force, whereas intensive margin changes happen when workers adjust the number of hours they work per year. Extensive margin changes appear in both the labor force participation rate and the aggregate hours worked data, whereas intensive margin changes only appear in the latter.

The authors find that most changes in aggregate hours worked from 2007 to 2013 and from 2013 to 2019 occurred along the extensive margin. However, the opposite was true from 2019 to 2022. During this period, per capita aggregate hours worked fell 6 hours per year on average along the intensive margin and 5 hours per year on average along the extensive margin.

After comparing the labor market trends from 2007 to 2019 with those of the Great Resignation and Quiet Quitting, Lee, Park, and Shin acknowledge the contribution of a lower labor force participation rate to current tightness in the labor market. However, they argue that the decrease in aggregate hours worked is also important and that changes in aggregate hours worked must be considered when determining tightness in the labor market. The authors assume workers will stay in jobs with a better work-life balance, keeping U.S. aggregate hours worked below prepandemic levels. Lee, Park, and Shin recommend that future research investigate whether that assumption is true and investigate why workers work fewer hours.