Underemployment in Europe – Three forms of it

This article reports on three forms of unemployment in the European Union (EU) which are not covered by the ILO definition of unemployment. They are: underemployed part-time workers, jobless persons seeking a job but not immediately available for work and jobless persons available for work but not seeking it. These three groups do not meet all criteria of the ILO unemployment definition i.e. being without work, actively seeking work, and being available for work. However, while not being captured through the unemployment rate, these groups still represent a form of unmet demand for employment. For this reason they constitute ‘halos’ around unemployment. While underemployed part-time workers form already part of the labour force, persons seeking work but not immediately available and persons available to work but not seeking are outside the labour force, but could be seen and termed as a ‘potential additional labour force’. Underemployment and potential additional labour force are indicators designed to supplement the unemployment rate to provide a more complete picture of the labour market.

Unemployment rate and new supplementary indicators, EU-28,

age 15-74, 2008-2014Q2

In 2014Q2 in the EU-28, the rate of underemployed part-time workers was 4.1 %. This rate is calculated over the population in the labour force. The rate of persons seeking a job but not immediately available for work in 2014Q2 was  1.0 %. The rate of persons available for work but not seeking it was 3.8 % in 2014Q2. In comparison, the unemployment rate was 10.1 % in 2014Q2. While EU-28 unemployment increased sharply between 2008 and 2013 due to the economic and financial crisis, the three soft forms of unemployment have experienced far more stable trends during this turbulent period. The proportion of underemployed part-time workers in the labour force has grown slightly from 3.1 % in 2008Q1 to 4.1 % in 2014Q2. The percentage of persons available but not seeking work followed the same trend, reaching 3.8 % in 2014Q2. People seeking work but not immediately available has remained close to 1 % over the whole time span, showing no noticeable change since the start of the economic crisis. Two factors explain this more stable trend compared to the unemployment rate.

Chosen excerpts by Job Market Monitor. Read the whole story at Underemployment and potential additional labour force statistics – Statistics Explained.