A multidimensional approach in the measurement of underemployment Giorgina Brown, Federica Pintaldi (ISTAT, Rome)

Time-related underemployment core indicator within decent work framework: –employment opportunities –adequate earnings and productive work –decent hours within labour force framework, indicator of underutilization of labour resources (similar and complementary to unemployment)

Time-related underemployment one of the 20 Key Indicators of the Labour Market (ILO) two rates are presented: –number of persons in time-related underemployment 1.as a percentage of the labour force 2.as a percentage of total employment

Definition “insufficient hours of work in relation to an alternative employment situation that a person is willing and available to engage in” (16th ICLS, 1998) Operationally, it identifies employed persons who in the reference period: –were willing to work additional hours –were available to work additional hours –had worked less than a threshold relating to working time

time-related underemployment Determining persons in time-related underemployment Italian LFS, 2004 (‘000s) Includes: –persons not immediately available because of the notice needed to change job Excludes: –persons who have worked less than usual because of illness, strike, compulsory maternity leave, or study not organized within one’s job

time-related underemployment Determining persons in time-related underemployment Italian LFS, 2004 (‘000s) threshold: Defining a threshold: –Legal or empirical –Usual or actual –Statistic used

threshold For defining a threshold: mean hours worked Seasonal factors Variable used Quarter Year st 2 nd 3 rd 4 th actual with absent actual without absent usual mixed all absent mixed some reasons41 the median has always the same value: 40 hours Excludes some employed Framework Different dimensions

40 hours threshold Time-related underemployed by threshold and variable (‘000s)

time-related underemployment Determining persons in time-related underemployment 4.4% of employment 4.1% of labour force

hours worked hours wanted Distribution of hours worked in the reference week by employed & underemployed and hours wanted by the underemployed

involuntary part-time Overlap between involuntary part-time and time-related underemployed (‘000s) Time-related underemployed yesnototal Full-time Involuntary part-time Other part-time Total Only 36% of underemployed are also involuntary part-time Hours worked is a more stringent and homogenous criterion considering the variability of working time in different periods and among occupations

38% of underemployed worked less than usual in reference week (vs. 17% of employed) → lack of work in specific periods. majority (58%) of underemployed who worked less than usual would like to work as usual, 15% state usual hours are very variable. But for majority of underemployed (59%), hours worked in reference week are as usual. Always or sometimes underemployed?

Other forms of underemployment “inadequate employment situations that affect the capacities and well-being of workers” (16th ICLS, 1998) Employed persons who during the reference period wanted to change their work situation for set of reasons chosen according to national circumstances, e.g. –inadequate use and mismatch of occupational skills –inadequate income –excessive hours »more difficult to measure »no operational definition

Skill-related underemployment Our proposal of operational definition coherent with time-related underemployment: –Looking for a new job(willing) –Available to start new job(available) –Mismatch of occupation and skills(threshold) Level of education as proxy for skills → indications of ISCO 88: –persons with university-level degree in groups 3 to 9 (Technicians to Elementary occupations) –persons with upper secondary school diploma in groups 4 to 9 (Clerks to Elementary occupations).

skill-related underemployment Determining persons in skill-related underemployment

alternative definition What would change if we were to use an alternative definition? Mismatch only = 6,495‘ 000s

Skill-related underemployment Of the 517 thousand in skill-related underemployment (2.3%): –413 have upper secondary school diploma (4.2% of those in employment with a diploma) –104 a university-level degree (2.3%).

Combination Combination of time-related and skill-related underemployment (‘000s) Small overlap: different profiles

by sex and age Proportion of underemployed by sex and age

type of work Proportion of underemployed by type of work

occupation group Proportion of underemployed by occupation group

Other dimensions? Income-related underemployment in part associated with time and skill. But low income possible even working many hours or for highly qualified occupations. To be coherent, we need variable on earned income to establish threshold of adequate income above which one cannot be classified as income-related underemployed –Measurement problems: interviewees often reticent To avoid overlap income-related/time-related dimensions, we could consider hourly income. We could distinguish those who would like to work more hours but only if paid more than their normal hourly rate, from those who want to work more even at same rate.