Definition

Underemployment rates measure how effectively workers utilize their business constraints abilities, experience, and access to the labor market. These people often have excellent skills, but work in low-paying jobs or are specialists who lack the training. Unlike unemployment, the individual works but is not performing at full capacity.

Brief Explanation of Underemployment

For example, engineers who work as pizza deliverymen can contribute more to the economy if companies hire them as specialists. A person who works part-time and is not working full-time is considered underemployed because he can provide more employment, which can boost the general yield.