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As full-time work has dropped by 4 per cent over the last two years there has also been a substantial increase in the number of temporary workers unable to find permanent jobs - up 40 per cent since the recession began.

Though labour market flexibility has been praised for keeping unemployment low and many people prefer to work part-time if pay rates make it affordable, there are an estimated 2.8 million 'underemployed' people [1] who are unable to earn enough money or find secure employment. ippr puts the cost of those in part-time work who are unable to secure full-time work at some £9bn in terms of lost earnings and benefits.

Other significant negative results of underemployment include there being fewer training opportunities provided by employers to part-time workers, and a potential negative impact on their future earnings.

Based on the experience of the last recession, rates of people involuntarily in part-time and temporary work could remain at the current high levels for as long as five years before starting to fall again.

ippr's other findings include:

The number of men in temporary jobs who can't find permanent work has increased by over a half (53 per cent) since the beginning of the recession.
The number of women in part-time work who can't find full-time work has risen by almost half (46 per cent) since the beginning of the recession.
One in five (22 per cent) of involuntary part-time workers is aged between 16 and 24.
The sectors in which part-time workers have most difficulty finding full-time work are sales and customer services, whereas temporary workers have most difficulty finding permanent work in administrative and secretarial roles.

ippr is arguing for both supply-side and demand-side policy measures to tackle the growing problem of underemployment. On the demand side, in addition to continued investment in apprenticeships, government should consider requiring employers to advertise and offer more jobs on a flexible basis. Offering flexible full-time work could help people with childcare or other responsibilities to take up the full-time work that is available, lifting them out of underemployment. The right to request flexible working should be extended to all employees and be made available from day one.

On the supply side, Jobcentre Plus and other private, public and voluntary sector providers should look to improve employment support for workers on short-term temporary or part-time contracts. For example, new Jobcentre Plus online employment support could be made available to these workers to help bridge the gap between benefits and employment and improve the likelihood of finding sustainable work at minimal cost.

Lisa Harker, Co-Director of ippr said:

'There are going to be many priorities for the new government but tackling the shortage of jobs and the costs of underemployment must be high on the agenda of any recovery plan. While many people want to work part time for family or other reasons, ippr's analysis and research show that a growing number of people are trapped in insecure work or unable to work enough hours to earn a decent income.

'Young people in particular are victims of this growing trend and there is danger that their long-term employment prospects will be badly affected. The large number of underemployed workers does not attract as much attention as those who have no work at all, but this hidden phenomenon is in many ways just as big a problem.'

Notes to editors

1. The estimate of 'underemployment' is the Office for National Statistics' own estimate based on the UK Labour Force Survey (LFS) definition of underemployment. This includes those surveyed for the LFS who were a) looking for an additional job or replacement job with longer hours or who wanted to work longer hours in their current job, b) those who were available to start working longer hours within two weeks and c) those whose constructed weekly hours were 40 or less (for people aged under 18) or 48 of less (for people aged 18 and over). For more details see: www.statistics.gov.uk/elmr/02_10/downloads/ELMR_Feb10_Clancy.pdf

2. ippr's analysis uses the latest available data from the Labour Force Survey to break down part-time and temporary workers by gender, age, industry and region - excluding workers who do part-time or temporary jobs by choice. Data from the Labour Force Survey was used to examine trends in temporary and part-time work from Q1 1992 to Q1 2010. Records for the number of workers in part-time and temporary work because they were unable to find full-time or permanent work began in 1992. The £9bn figure for costs associated with underemployment assumes people's hourly earnings do not increase when they move from part- to full-time working.

Download the technical briefing.

3. ippr can put journalists in touch with people who are available to talk about their experiences. For example, Thomas Office, 25, from Newcastle, trained to be a draughtsman, but found there were no jobs available in construction or architecture once he qualified. He has since worked in a series of temporary jobs in the retail and customer service industries, often with long gaps of unemployment in between. He is currently on a six month contract at the Citizens Advice Bureau and hopes it will be made permanent.

4. ippr's project Now It's Personal: Citizen-centred welfare is examining how to create a more responsive and effective welfare system built around citizens' needs.

Contacts

Tim Finch, Director of Strategic Communiciations, 020 7470 6106 / 07595 920 899 / t.finch@ippr.org

Clare McNeil, Research Fellow, 0207 470 6157 / c.mcneil@ippr.org