• Share this page to Facebook
  • Share this page to Twitter
  • Share this page to Google+
The underutilised

Labour underutilisation reflects the total number of people in the labour force who are not being fully utilised, as well as some who are outside of the labour force who can be considered ‘potential labour supply’. The measure is concerned with issues of quantity of employment, rather than quality of employment.

The employed, unemployed, and not in the labour force groups are traditionally treated as discrete categories in the conventional labour force framework. If we view labour market activity as a continuum (see revised framework in figure 1), a group on either side of unemployment shares some characteristics with the unemployed. These two groups can be viewed as the ‘halos’ of unemployment – together with the unemployed, they form the population considered to be underutilised. The two halos are the underemployed (on the ‘employment’ side) and the potential labour force (on the ‘not in the labour force’ side).

Figure 1
The conventional and revised labour force frameworks

Diagram, conventional and revised labour force frameworks.

The underemployed

There are several types of underemployment. The measure used here is time-related underemployment, which exists when an employed individual wants to work more hours than they usually do and is available to do so.

The ILO guideline (ILO, 2013) defines the underemployed as employed individuals who:

  • worked less than a specified threshold of hours (usually part-time), and
  • would like to work more hours, and
  • were available to do so in the reference week.

The unemployed

According to the international standard definition of unemployment (ILO, 2013), the unemployed comprises all individuals who in the reference week:

  • were not in employment, and
  • were available to work, and
  • were actively seeking employment.

The potential labour force

The potential labour force consists of people who are not in the labour force but can be considered to be ‘just outside it’. They meet two of the three criteria (listed above) needed to be considered unemployed. Two main groups of individuals are in the potential labour force:

  1. unavailable jobseekers – people who were actively seeking work, were not available to have started work in the reference week, but would become available within a short subsequent period
  2. available potential jobseekers – people who are not actively seeking work but were available in the reference week and want a job (the ‘discouraged’ are included in this group).

The first group is considered to have slightly closer attachment to the labour market than the second group, but both have much stronger attachment than other groups who are not in the labour force.

The extended labour force

In addition to the measures outlined above that form the underutilised population, a further measure has also been introduced, the extended labour force. It measures the total labour force (those employed and unemployed) plus the potential labour force. This is used as the denominator when constructing the underutilisation rate.

  • Share this page to Facebook
  • Share this page to Twitter
  • Share this page to Google+
Top
  • Share this page to Facebook
  • Share this page to Twitter
  • Share this page to Google+