Underemployment refers to employment that is inadequate, inferior, or low quality, relative to some standard. All researchers agree that there is a small handful of distinct types of underemployment, but there is less agreement on exactly what counts as underemployment and how many types there are. Nevertheless, the following experiences are regularly classified as underemployment:
- Overqualification: These workers possess surplus formal education; work experience; or knowledge, skills, and abilities (KSAs) relative to the job demands or requirements.
- Involuntary educational mismatch: Workers who are employed in a field outside their area of education because they cannot find employment that better matches their education. This is a distinct category from overqualification in that these employees are differently qualified, rather than overqualified.
- Involuntary part-time or temporary employment: Workers who are employed in part-time or temporary jobs because they cannot find full-time or permanent positions.
- Underpayment: The workers’ wages are significantly less than a certain standard. Standards include workers’ wages from previous jobs, typical wages for workers’ educational backgrounds, and a livable wage.
Other types of work experiences occasionally identified as underemployment include unemployment, intermittent (un)employment (workers who either have experienced recent periods of both employment and unemployment or work on jobs that are seasonal or otherwise sporadic), subemployment (workers who are not currently employed and have ceased the job search process because they do not believe that jobs are available), and status underemployment (workers who receive less occupational prestige from their jobs than expected based on their background).
Underemployment as Involuntary Mismatch
In general, a key prerequisite for defining a work situation as underemployment is that it be involuntary. For example, an individual who moves from full-time work to part-time work as part of a transition to retirement is not underemployed, whereas someone who would prefer a full-time job but can only find a part-time job is underemployed. This is an important distinction, because researchers have begun to show that employees who voluntarily choose a given work situation such as part-time work experience more positive job attitudes than employees who find themselves in the same work situation despite preferring something more, for example, full-time work.
Each type of underemployment, by definition, represents a discrepancy between the actual work situation and an alternative situation that is preferred by the employee. Recognizing this, researchers are beginning to use person-job fit and related models to frame underemployment research and generate hypotheses. In essence, each type of underemployment can be viewed as an instance of poor person-job fit. For example, overqualification reflects poor fit between worker abilities and job demands, whereas underpayment reflects poor fit between worker needs and job supplies.
Researchers may measure underemployment by using either personnel data or self-report measures. For example, overqualification may be assessed by comparing someone’s level of education and experience (as stated on a resume or job application) to a job description. Alternatively, the employee could be asked to complete a questionnaire with items designed to tap perceptions of overqualification. In addition to these strategies, some researchers measure underemployment by culling data from databases containing labor statistics, such as the National Longitudinal Survey of Youth (NLSY). Importantly, self-report measures have the advantage of accounting for whether one’s current work situation is voluntary or involuntary. Unfortunately, well-established, valid self-report measures of the various types of underemployment do not yet exist.
Underemployment Prevalence and Demographic Correlates
Estimates vary, but it appears that roughly one in five U.S. workers currently experience underemployment in one form or another. Note that this rate is significantly higher than the typical unemployment rate. Not surprisingly, the proportion of individuals who may be classified as underemployed fluctuates along with the status of the economy, with the experience being more common in times of economic recession. This also means that rates of unemployment and rates of underemployment tend to display similar trends over a given period of time.
Several groups of workers are particularly likely to experience underemployment. In the United States, researchers consistently find that women and ethnic minorities (particularly African Americans and Latin Americans) are underemployed at higher rates than males and Caucasians. Because cultural norms place the primary responsibility for child care and eldercare on women, women often must choose jobs that are flexible over those that may best use their education or offer the greatest career opportunities. Discrimination, language and cultural barriers, and lower educational attainment may each contribute to underemployment among ethnic minorities. There is no consistent finding in terms of age, but recent college graduates (who are highly educated but often have little work experience) and older white-collar workers (who are among the most common victims of downsizing) commonly experience underemployment.
Researchers have consistently hypothesized a variety of negative consequences associated with under-employment, from dissatisfaction with one’s job, to higher rates of absenteeism and turnover, to poor physical and psychological health. Managers tend to avoid hiring applicants who appear overqualified because of similar predictions. Unfortunately, as compared with the large literature on the effects of unemployment, there is little existing research on underemployment and its outcomes.
Underemployed individuals generally report lower levels of job satisfaction than individuals who are not underemployed, particularly for facets of satisfaction that are relevant to the type of underemployment. For example, overqualified workers seem most unhappy with the work itself but are not necessarily dissatisfied with their coworkers or supervisor. There is also some evidence that underemployment may also be associated with a relatively weak emotional attachment to the organization (affective commitment). No consistent relationship has been found between underemployment and other types of commitment, such as commitment based on the costs of leaving the organization (continuance commitment), or a sense of obligation to the organization (normative commitment).
Underemployment and Job Performance
Researchers have posited that, because of a lack of motivation or commitment, underemployed workers may perform their tasks at a lower level and engage less in organizational citizenship behaviors (such as working late to help a coworker finish a project). In some cases, however, the reverse could be true. For example, temporary workers who would prefer to have a permanent work arrangement with the organization may be highly motivated to perform at a higher level or engage in citizenship behaviors, to maximize the chances that they will be offered a permanent position. Unfortunately, there are practically no data on the relation between underemployment and either type of job performance.
Underemployment and Employee Withdrawal
There is some early evidence to suggest that underemployment is associated with higher rates of absenteeism, intentions to quit one’s job, and job search behavior. However, at this time, we have no data to test the proposition that underemployment will predict actual turnover behavior. This is surprising, because researchers and managers commonly predict that the underemployed (particularly overqualified workers) are particularly likely to search for more adequate employment and leave their present jobs.
Underemployment and Psychological and Physical Well-Being
It is well-established that being out of work has negative psychological and behavioral effects, such as low self-esteem, stress, substance abuse, health problems, and depression. In what is probably the most extensive research program on underemployment, David Dooley and Joann Prause (2004) demonstrated that underemployment (which they call inadequate employment) has similar deleterious effects on the worker’s psychological and physical well-being. In other words, being underemployed may be as traumatic and damaging as being unemployed. They also presented evidence that, in some cases, the relationship between underemployment and mental health may be bidirectional, with factors such as low self-esteem placing the individual at greater risk for underemployment, which then may produce further negative psychological effects. It is important to note that Dooley and Prause did not investigate the effects of all types of underemployment but instead focused on involuntary part-time employment, underpayment, and intermittent unemployment.
Underemployment, or employment that is insufficient relative to a standard, takes several forms, including overqualification, involuntary educational mismatch, involuntary part-time or temporary employment, and underpayment. The most consistent findings are that underemployment is associated with job dissatisfaction, low affective commitment, and poor psychological health, but the causal mechanisms involved in these relationships are still not well understood.
In general, given how common underemployment is, there is a surprising lack of research on this experience, its antecedents, and its consequences.
Empirical work is particularly scant with regard to overqualification and involuntary educational mismatch and on the effects of underemployment on employee performance and withdrawal behaviors. Finally, what we know about underemployment is limited to workers in the United States, because there is little published research on underemployment from other countries or cultures.
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