Underemployment

• Definition of Underemployment
• What is Underemployment?
• Causes of Underemployment
• Types of Underemployment

Definition of Underemployment

In economics, the term “Underemployment” can be described as a job profile where the hired employee is overqualified or forced to work in low-paying or low-skill jobs . They have a great extent of expertise, education, knowledge, and skill sets, and the job profile or work is not a perfect fit for him/her in accordance to their skills, experience, and expertise.

Underemployment shows the underutilization of talent due to the unavailability of ideal employment for them. Sometimes, in some extreme conditions, instead of a full-time job, the candidate starts working in an involuntary part-time job or work scenario. This may turn into Underemployment. 

What is Underemployment?

Underemployment is an economic term used to put a ray on various perspectives of society that represents the underuse of an overly talented candidate. Such candidates find it difficult to search for a job or work that totally justifies the level of expertise and education he has. For example, suppose a student who studied in the U.S., has M.Tech. and Ph.D. degree and works in a retail store as a sales assistant. Thus we can clearly see that he is in Underemployment, completely unfit for that job role.    

Causes of Underemployment

Underemployment significantly occurs at times when employment falls for the hidden staffing or overstaffing practices due to seasonal work. Underemployment is a major obstacle to the economic growth of a country or regional geographical place. It has often been seen that Underemployment may result in poverty in a specific country. Underemployment can also cause poor mental health leading to stress and anxiety.

Though there are so many causes of Underemployment in a specific geographical region, technological advancements and an imbalanced supply and demand ratio are the main reasons for Underemployment. Other than these, the economic ups and down or recession is another reason that raises the situations like Underemployment where the candidate's skill-set is not fully utilized as it downsizes and lays off qualified workers and takes away the jobs of many employees. Aspiring candidates are forced to work at a low job profile that doesn’t require that many qualifications. 

Types of Underemployment

Financial analysts find two types of Underemployment in the economy. These are as follows:

1. Visible Underemployment: It refers to the employment situation in which an individual works fewer hours than is necessary for a full-time job, and due to the reduced hours, they may work for two or more part-time jobs in order to meet their financial needs.

2. Invisible Underemployment: It refers to the employment situation in which an individual is unable to find a desired job in accordance with their skill set, and consequently, they work in a job that is not an ideal fit with their skill set and, in most cases, it also pays much below their customary wage.