The Contribution of Hour Constraints to Working Poverty in Britain

We explore the implications of hours demand constraints on the propensity to experience poverty. Our analysis of British data suggests that whilst the extent of poverty increased over the period 1985-2001, its intensity, under some measures, declined. In terms of hours constraints, we find that even the most generous elimination of underemployment vis allowing workers to supply as many hours as they prefer (but not as few) without encountering any negative employment and/or hourly wage implications, leaves the poverty rate and poverty gap virtually unchanged.