Study of Underemployment
Labour Economics
Underemployment
TABLE OF CONTENTS
SECTION I 1. Introduction 2. Definition of Underemployment 3. Conceptual framework 4. Underemployment 5. Underemployment-features and reasons 6. Underemployment equilibrium
SECTTION II 1. Problem statement and Objectives 2. Methodology 3. Analysis 4. Observations
SECTION III 1. Conclusion 2. Detection of invisible underemployment 3. Solutions 4. Measure to combat underemployment Section I
1. Introduction Most economists instinctively dismiss the term underemployment when they first encounter it. The conventional wisdom is that someone is working, seeking work, or voluntarily out of the labor force. If they do not like their job or the number of hours worked per week, they will pursue opportunities until they find a better fit. However, a bit of reflection suggests that the concept of underemployment is quite relevant and important. While people have wide and continuous preferences for hours worked per day or week, most jobs available still require thirty-five to forty hours per week spread over five days. Thus, given this fixed hours constraint, most people are either underemployed or over employed.
Consider the so-called trailing spouse where one spouse finds a very satisfying job in a place where there is no market for the special skills of their partner. Others find that they would have to relocate or commute long distances to attain a job that matched their training and abilities, but they value certain lifestyle patterns .In both of these examples, the person’s underemployment is voluntary. They could relocate and receive a wage commensurate with their human capital. Nevertheless, so long as they choose to live in a labor market that is too thin or sparse to provide them appropriate employment opportunity, they are underemployed and the local labor market has excess capacity.
2.Definition of Underemployment
Current international standards on the
Underemployment
TABLE OF CONTENTS
SECTION I 1. Introduction 2. Definition of Underemployment 3. Conceptual framework 4. Underemployment 5. Underemployment-features and reasons 6. Underemployment equilibrium
SECTTION II 1. Problem statement and Objectives 2. Methodology 3. Analysis 4. Observations
SECTION III 1. Conclusion 2. Detection of invisible underemployment 3. Solutions 4. Measure to combat underemployment Section I
1. Introduction Most economists instinctively dismiss the term underemployment when they first encounter it. The conventional wisdom is that someone is working, seeking work, or voluntarily out of the labor force. If they do not like their job or the number of hours worked per week, they will pursue opportunities until they find a better fit. However, a bit of reflection suggests that the concept of underemployment is quite relevant and important. While people have wide and continuous preferences for hours worked per day or week, most jobs available still require thirty-five to forty hours per week spread over five days. Thus, given this fixed hours constraint, most people are either underemployed or over employed.
Consider the so-called trailing spouse where one spouse finds a very satisfying job in a place where there is no market for the special skills of their partner. Others find that they would have to relocate or commute long distances to attain a job that matched their training and abilities, but they value certain lifestyle patterns .In both of these examples, the person’s underemployment is voluntary. They could relocate and receive a wage commensurate with their human capital. Nevertheless, so long as they choose to live in a labor market that is too thin or sparse to provide them appropriate employment opportunity, they are underemployed and the local labor market has excess capacity.
2.Definition of Underemployment
Current international standards on the