Time Related Under Employment

KILM 12 is used as a measure of the underutilization of the workforce’s productive capacity. This statistics can be used to supplement information from other KILMs on employment and unemployment to enrich the analysis of the efficiency of the labour market. To give an even broader picture of the condition of the labour market, this indicator could be further assessed in conjunction with other KILMs such as the hours of work under KILM 7; KILM 2: employment to population ratio, KILM 13: inactivity rates, KILM 3: status in employment and KILM 18: working poverty and labour productivity. In combination, analyst would be able to evaluate comprehensively trends in the varied facets of the labour market thus contributing to policies to generate employment for all segments of the workforce.

In should be recognized that in most circumstances just identifying whether a person is employed or unemployed does not add very much to better understand the issues certain segments may be facing. So time-related underemployment adds some detail to challenges some citizens face as workers, particularly in situations involving small-scale agriculture activities, the provision of basic services and an array of informal activities, where workers are most often on the edge of survival eking out a living which provide meagre earnings whether in cash or in kind.

Few people with these jobs and working only a few hours a week would consider themselves to be gainfully employed, even though in statistical terms they may be classified as such, and therefore KILM 12 would single them out to be a segment of the workforce that deserve some attention.

Low unemployment need not necessarily signify that a country’s labour market is functional and near full employment, if time-related unemployment is prevalent. This has implications for the earning levels of the workforce, their productivity capability and a possible mismatch or underutilization of their skills. Furthermore, this may well lead to a situation where a large segment of the workforce is constantly looking for additional work hours or jobs, thereby competing with people who are without a job, particularly young workers first entering the workforce.

As is a common issue for all KILMs, due caution must be taken into consideration when making cross country comparisons because the various data collection and estimation methods of each jurisdiction contribute to important variations in KILM 12 statistics. Most countries count workers who want to have additional hours of activities (code 2), but many countries also predominantly include workers who report involuntary reasons for either not working longer hours or the current hours worked (code 1). However, what constitutes “involuntary” varies across countries giving rise to comparability problems. Finally, very few countries actually ask workers whether they have actively sought to secure more hours of work (code 3).

Since no international definition of “part-time” work (KILM 6) has been agreed to, each country may differ in their description of the threshold of “hours actually worked” below which time-related underemployment is said to be present. For example, some countries define the threshold as the legal hours worked, others consider it to be the usual hours worked of full-time employed persons, and the OECD consider the underemployed as those involuntarily working part-time at or below 30 hours a week.