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.^{[according to whom?]} Policy-makers may under-research these meanings when assessing the economy as they focus on unemployment instead:

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.

In one usage, underemployment describes the employment of workers with high skill levels and postsecondary education who are working in relatively low-skilled, low-wage jobs. For example, someone with a college degree may be a bartender, or working as a factory assembly line worker. That may result from the existence of unemployment, which makes workers with bills to pay (and responsibilities) take almost any jobs available, even if they do not use their full talents. That can also occur with individuals who are being discriminated against, lack appropriate trade certification or academic degrees (such as a high school or college diploma), have disabilities or mental illnesses, or have served time in prison.

Two common situations that can lead to underemployment are immigrants and new graduates. When highly trained immigrants arrive in a country, their foreign credentials may not be recognized or accepted in their new country, or they may have to do a lengthy or costly re-credentialing process. As a result, when doctors or engineers from other countries immigrate, they may be unable to work in their profession, and they may have to seek menial work. New graduates may also face underemployment because even though they have completed the technical training for a given field for which there is a good job market, they lack experience. Recent graduates with a master's degree in accounting or business administration may have to work in a low-paid job as a barista or store clerk, which does not require a university degree, until they are able to find work in their professional field.