Technical Appendix 2: Time-related underemployment

Time-related underemployment is broadly defined as a situation where people are working fewer hours than they wish (Wang 2018; Bell and Blanchflower 2013). Time-related underemployment is often measured in terms of the number of people who could not find a full-time job, in other words, people involuntarily working part-time hours. However this approach overlooks the current hours worked or the desired additional hours and it fails to recognise that full-time workers may also want additional hours. The International Labour Organisation (ILO 2013b) improves upon this definition by considering as underemployed those wanting to work more hours, are available to do so, and are currently working a number of hours below a specified threshold. The Office of National Statistics (ONS 2022a) in the UK draws upon this approach and considers as underemployed those who:

• are looking for an additional job or replacement job with longer hours, or who wanted to work longer hours in their current (main) job.

• were available to start working longer hours within two weeks.

• whose usual weekly hours were 40 or less for people aged under 18 years or 48 or less for people aged 18 years and over.

The official underemployment rate is then calculated as the proportion of underemployed people among the total active population.

We follow a similar approach to the ONS by measuring time-related underemployment using three main indicators:

1. Part-timers who work part-time because they could not find a full-time job.

2. Workers who would like to work longer hours in their current job.

3. Workers seeking a replacement job with more hours.

We calculate the underemployment rate based on individuals who are employed (both employees and self-employed) rather than considering the entire active population.

References

Bell, David N F, and David G Blanchflower. 2013. “Underemployment in the UK Revisited.” National Institute Economic Review, F8–22. https://www.jstor.org/stable/43575526.

———. 2013b. “Report II of the 19th International Conference of Labour Statisticians.” Geneva: International Labour Organisation. https://www.ilo.org/wcmsp5/groups/public/---dgreports/---stat/documents/publication/wcms_220535.pdf.

ONS. 2022a. “Alternative Measures of Underutilisation in the UK Labour Market.” London: Office for National Statistics. https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/unemployment/articles/alternativemeasuresofunderutilisationintheuklabourmarket/2022-09-05.

Wang, Jing. 2018. “Hours Underemployment and Employee Turnover: The Moderating Role of Human Resource Practices.” International Journal of Human Resource Management 29 (May): 1565–87. https://doi.org/10.1080/09585192.2016.1203346.