Underemployment

Underemployment is the underuse of a worker because their job does not use their skills, offers them too few hours, or leaves the worker idle. It is contrasted with unemployment, where a person lacks a job at all despite wanting one. Examples of workers who may be considered underemployed include those who hold a part-time job but wish to work more hours, part-time workers who wish to work full-time, and overqualified workers who have education, experience, or skills beyond their role's requirements. Underemployment has been studied from a variety of perspectives, including economics, management, psychology, and sociology. In economics, underemployment has three different distinct meanings and applications. Policy-makers may under-research these meanings when assessing the economy as they focus on unemployment instead:

"Overqualification" or "overeducation", the employment of workers with high education, skill levels, or experience in jobs that do not require such abilities. For example, a trained medical doctor with unrecognized foreign credentials working as a taxi driver. "Under hours" or "involuntary part-time" work, for those who wish to work more hours and/or move from part-time to full-time. By extension, the term is also used in regional planning to describe regions where economic activity rates are unusually low due to a lack of job opportunities, training opportunities, or services like childcare and public transportation. "Overstaffing", "hidden unemployment", or "disguised unemployment" (also called "labor hoarding"), the practice in which businesses or entire economies employ workers who are not fully occupied. For example, workers currently not being used to produce goods or services due to legal or social restrictions or because the work is highly seasonal. Underemployment is a significant cause of poverty as pay may be insufficient to meet basic needs. It has been associated with OECD wage stagnation. Underemployment is a problem particularly in developing countries, where the unemployment rate is often quite low, as most workers are doing subsistence work or occasional part-time jobs. In 2011, the global average of full-time workers per adult population was only 26%, compared to 30–52% in developed countries and 5–20% in most of Africa. In 2018–2019, the global average rose to 77%, while in low and low-middle income countries, it was around 60–70%. A similar rate was on the high income countries, while on the upper-middle income countries – around 80%. A Gallup investigation of its surveys in 154 countries from 2017 to 2022 revealed that a median of 20% of men and 27% of women in the workforce were underemployed.

Underutilization of skills

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