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The Extent and Consequences of Underemployment in Australia

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  • Roger Wilkins

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

Underemployment is generally conceived as excess labour supply associated with employed persons – that is, as a situation where employed persons would like to work more hours at prevailing wage rates. Using information collected by the 2001 Household, Income and Labour Dynamics in Australia (HILDA) survey, this study seeks to investigate the extent of underemployment and its effects on outcomes such as income, welfare dependence and subjective well-being. It is found that over one in six employed persons is underemployed, corresponding to a failure to utilise 5 per cent of hours supplied by employed persons. Underemployment is more frequently associated with part-time employment for females, but for males is more frequently associated with full-time employment. Models estimated of the effects of underemployment on outcomes imply that, while unemployment clearly has greater adverse consequences, underemployment is nonetheless associated with significant detrimental effects on the outcomes examined. Negative effects are found for both part-time employed and full-time employed workers who would prefer to work more hours, but effects are greater for underemployed part-time workers, and are particularly large for part-time workers who would like to work full-time. Indeed, for part-time workers seeking full-time employment, effects attributable to underemployment are, for some outcomes, not far short of those attributable to unemployment.

Suggested Citation

  • Roger Wilkins, 2004. "The Extent and Consequences of Underemployment in Australia," Melbourne Institute Working Paper Series wp2004n16, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2004n16
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    File URL: http://melbourneinstitute.unimelb.edu.au/downloads/working_paper_series/wp2004n16.pdf
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    References listed on IDEAS

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    Cited by:

    1. Qingfang Wang & Tetiana Lysenko, 2014. "Immigrant underemployment across US metropolitan areas: From a spatial perspective," Urban Studies, Urban Studies Journal Limited, vol. 51(10), pages 2202-2218, August.
    2. Robert Breunig & Xiaodong Gong & Gordon Leslie, 2015. "The Dynamics of Satisfaction with Working Hours in Australia: The Usefulness of Panel Data in Evaluating the Case for Policy Intervention," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 2(1), pages 130-154, January.
    3. T. Kifle & P. Kler & S. Shankar, 2019. "The Underemployment-Job Satisfaction Nexus: A Study of Part-Time Employment in Australia," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(1), pages 233-249, May.
    4. Murat Arik & David A. Penn, 2010. "Available Labor Force in Southern Middle Tennessee: An Underemployment Study," Studies 201001, Middle Tennessee State University, Business and Economic Research Center.
    5. T. Kifle & P. Kler & S. Shankar, 2017. "Underemployment and its impact on job satisfaction: An Australian study on part-time employment," Discussion Papers in Economics economics:201712, Griffith University, Department of Accounting, Finance and Economics.
    6. Scott Baum & William Mitchell, 2008. "Adequate Employment, Underutilisation and Unemployment: an Analysis of Labour Force Outcomes for Australian Youth," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 11(3), pages 187-201.

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