Beyond Hours: Hidden Profiles of Underemployment in Australia

Underemployment in Australia represents a critical facet of precarious work, shaped not only by insufficient hours and skill underutilisation but also by care responsibilities and financial insecurity. Using data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, this study employed latent class analysis (LCA), a person-centred, model-based clustering method, to uncover hidden subgroups within the underemployed population. Previous studies identify different profiles, but few embed care burden and financial stress as core latent dimensions. This study extends latent class approaches by integrating multidimensional vulnerabilities into subgroup analysis. The LCA analysis revealed four distinct classes. These findings confirmed three hypotheses: (H1) Care burden is a core latent dimension of underemployment (Classes 1 and 2), (H2) economic insecurity is a second defining dimension (Class 3), and (H3) a mental health/social isolation subgroup exists (Class 4). Class 1 exhibits dual care burdens and high representation from culturally and linguistically diverse (CALD) backgrounds. Class 2, Parents with Children, forms the largest group and is defined by intensive childrearing and caregiving roles. Class 3, Financially Strained Undereducated, includes individuals with low educational attainment experiencing pronounced financial hardship. Class 4, Socially Isolated with Poor Mental Health, represents the smallest yet most disadvantaged group, characterised by severe psychological distress, lack of social support, and acute financial vulnerability. Together, these findings highlight the need for tailored policy responses for diverse experiences among the underemployed and reveal intersecting social and economic disadvantages.