'Involuntary' part-timers may be here to stay, Fed study shows

The number of involuntary part-timers rose sharply after the recession, and in the years since has stayed relatively large even as the unemployment rate itself has dropped.

Some economists, including some policymakers at the Fed, have assumed that such workers represent labor market "slack" and that their numbers will shrink as the labor market heals.

Easy monetary policy, in this view, will boost demand for labor and help people who want full-time jobs find them.

The San Francisco Fed study attributes more of the rise in involuntary part-timers to permanent changes in the labor market than previous estimates have.

"Involuntary part-time work may remain significantly above its pre-recession level as the labor market continues to recover," wrote Rob Valletta and Catherine Van Der List, both economists at the San Francisco Fed.

The finding has important implications for monetary policy, because it suggests the U.S. economy may be closer to full employment than otherwise thought.

Before the crisis, involuntary part-timers made up only about 3 percent of the labor force. In May, they accounted for about 4.25 percent, government figures released on Friday show.

Structural factors, the study's authors found, have lifted the rate of involuntary part time work by as much as 1.25 percentage points since 2006.

If the findings prove correct, what had been previously been seen as an unusually high number of involuntary part-timers is better understood as the new normal for the U.S. labor market.

(Reporting by Ann Saphir; Editing by Leslie Adler)