What defines underemployment?

Underemployment is defined primarily as a situation where individuals are working fewer hours than they desire. This can occur when people are part-time workers who would prefer to be working full-time or when they are in jobs that do not utilize their skills and education to the fullest extent. As such, they may feel unsatisfied or underutilized in their current employment situation. This condition highlights the disparity between an individual’s current job status and their desired level of employment, making it a critical factor in understanding labor market dynamics and economic health.

Other options highlight different aspects of labor market challenges, but they do not accurately capture the specific nature of underemployment. For example, being jobless but not in the labor force refers to individuals who are not actively seeking work, which is not a facet of underemployment. Similarly, being unable to find suitable jobs may reflect unemployment, and transitioning between roles at work suggests mobility rather than the subtleties of underemployment where there is a mismatch in hours worked or skill utilization.