Underemployment refers to an employment situation that is insufficient in some important way for the worker, relative to a standard. Examples include holding a part-time job despite desiring full-time work, and overqualification, where the employee has education, experience, or skills beyond the requirements of the job.
Underemployment has been studied in recent decades from a variety of perspectives, including economics, management, psychology, and sociology. In economics, for example, the term underemployment has three different distinct meanings and applications. All meanings involve a situation in which a person is working, unlike unemployment, where a person who is searching for work cannot find a job. All meanings involve under-utilization of labor which is missed by most official (governmental agency) definitions and measurements of unemployment.
Underemployment can refer to:
- "Overqualification" or "overeducation", or the employment of workers with high education, skill levels, and/or experience in jobs that do not require such abilities. For example, a trained medical doctor who works as a taxi driver would experience this type of underemployment.
- "Involuntary part-time" work, where workers who could (and would like to) be working for a full work-week can only find part-time work. 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 due to a lack of services such as childcare and public transportation.
- "Overstaffing" or "hidden 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.