Peter Stam, J. Coleman
Sep 14, 2010
Economic & Labour Market Review
SUMMARYHours of work are recognised by the Office for National Statistics (ONS) and the International Labour Organisation (ILO) as key indicators of the labour market. The difference between actual and usual hours worked may result from firms using overtime to meet increasing demand or reducing hours to control costs, and as such, could be considered an indicator of labour market flexibility.The Monetary Policy Committee at the Bank of England pay close attention to the number of hours worked when considering monetary policy decisions as these may be more closely related to changes in demand and output than the level of employment. This is because firms might want to retain staff during periods of lower output growth, or conversely delay recruitment until the need for it is clearly established through a sustained increase in demand. This article describes the different measures of hours data in the UK and investigates how they may be used to analyse the UK labour market.