Is Under-Employment due to Labour Hoarding? Evidence from the Australian Workplace Industrial Relations Survey

In this paper, Australian data are used to study the characteristics of workers who are constrained in their hours of work. Matched employer–employee data allow us to control for their employers' characteristics as well. In particular, the information on the firms' state of demand provides useful evidence on the underlying cause of under-employment. The labour hoarding model cannot explain the observed patterns involving under-employment. Alternative explanations are offered.