Underemployment and potential additional labour force statistics
From Statistics Explained
- Data from April 2013. Most recent data: Further Eurostat information, Main tables and Database.
This article reports about 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 being not captured through the unemployment rate, these groups still represent some form of unmet demand for employment. For this reason they constitute 'halos' around unemployment. Underemployment and potential additional labour force are indicators designed to supplement the unemployment rate to provide a more accurate picture of the labour market.
Main statistical findings
Recent developments at European and Member States level
In 2012Q4 in the EU-27, the rate of underemployment part-time workers was 3.9 % as compared to 3.7 % in 2011Q4. This rate is calculated over the population in the labour force. The rate of persons seeking a job but not immediately available for work was in 2012Q4 0.9 % compared to 0.8 % one year before. The rate of persons available for work but not seeking it was 3.6 % in 2012Q4, identical to the 2011Q4 rate. In comparison, the unemployment rate was 10.6 % in 2012Q4 and 9.9 % in 2011Q4. While the EU-27 unemployment increased sharply since 2008 and the beginning of 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 been slightly growing from 3.1 % in 2008Q1 to 3.9 % in 2012Q4. The percentage of persons available but not seeking work followed the same trend, reaching 3.6 % in 2012Q4. 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. First, the three indicators supplementing unemployment have by construction looser requirements than unemployment, because they look at groups of persons who do not simultaneously fulfill all the criteria of the ILO unemployment definition. This softer definition makes the indicators more stable, as people in those three categories are less likely to leave the group. Secondly, persons in underemployment and persons available for work but not seeking tend to have structural reasons for their situation, e.g. because they believe no work is available, they are fulfilling domestic tasks, etc. In the case of persons seeking work but not available the explanation is different because they are a very dynamic group with high rotation. What happens is that the flow of individuals entering in the category is very much balanced out by the flow of individuals leaving the category. This is because many of them are students starting to look for a job before the end of their studies. There is a rather steady outflow of students finishing their students and joining the labour market (hence leaving the indicator possibly to become employed or unemployed), balanced out by another steady inflow of students approaching the end of their studies and wanting to work but not being available to work yet.
Among the EU Member States in 2012Q4, underemployed part-time work is highest in Ireland (6.8 % of the labour force), the United Kingdom (6.0 %) and Spain (6.4 %), and lowest in the Czech Republic (0.5 %) and Bulgaria (0.7 %). Compared to the situation one year before, the majority of EU countries have experienced an increase in the share of underemployed part-time workers. This increase was particularly high in Luxembourg (+1.2 percentage point), Cyprus (+1.1 percentage point), Spain and Greece (+0.9 pp each). Some countries, in particular Latvia (-1.1 pp) and Denmark (-0.6 pp), have however less underemployed part-time workers than in 2011Q4. The indicator 'persons seeking work but not immediately available' is highest in France (1.5 % of the labour force) Cyprus (1.4 %) and Finland (1.2 %) and lowest in Hungary (0.2 %), Luxembourg and Italy (0.4 % each). Compared to 2011Q4, the highest increase took place in Cyprus (+0.8 pp) and the highest decrease in Belgium (-0.3 pp). Finally, looking at the indicator 'persons available but not seeking', the ratio is highest in Italy (11.4 %) and Bulgaria (7.6 %) and lowest in France (0.9 %), Czech Republic and Lithuania (1.2 % each). Compared to the situation one year before, the highest increase was in Portugal (+1.1 pp), the highest decrease in Latvia (-1.9 pp) and Luxembourg (-0.9 pp).
A detailed look at 2012
In the EU-27 in 2012 there were 9.2 million underemployed part-time workers, 2.3 million jobless persons seeking a job but not immediately available for work, and 8.8 million persons available for work but not seeking it. Looking at the evolution between 2011 and 2012, while the total number of employed people has decreased (from 216.5 million to 215.5 million), the number of employed people considered as underemployed part-time workers has increased (from 8.6 million to 9.2 million). Similarly, while the inactive population has significantly decreased (from 137.8 million in 2011 to 136.1 million in 2012), the potential additional labour force (composed of the two groups of jobless persons seeking a job but not immediately available for work and persons available for work but not seeking it) has slightly increase (from 10.8 million to 11.0 million).
Groups covered by the supplementary indicators consist mainly of women
The supplementary indicators cover predominantly women. This contrasts with a majority of men in unemployment (54.1 % in the EU-27 in 2012) and in employment (54.4 %).
Among the supplementary indicators, the predominance of women is strongest in the group of underemployed part-time workers. Two thirds of them are women (66.7 %) in the EU-27 in 2012, namely 6.1 million women as compared to 3.1 million men (see Figure 3). This imbalance mirrors the gender gap in part-time employment (whether underemployed or not), as 74.6 % of all part-time workers in the EU-27 in 2012 were women. However it is worth noting that while there are fewer men underemployed, in relative terms the share of part-time workers who are underemployed is higher among men (28.1 %, i.e. 3.1 million out of 10.9) than among women (19.2 %, i.e. 6.1 million out of 32).
There is a majority of women among persons seeking work but not immediately available (54.8 % i.e. 1.2 million women compared to 1.0 million men), and a considerable majority among persons available for work but not seeking it (58.0 %, i.e. 5.1 million women vs. 3.7 million men).
A closer look at the age distribution
Out of the 9.2 million underemployed part-time workers in the EU-27 in 2012, 1.6 million were aged 15-24, 6.6 million were aged 25-54 and 1.1 million were aged 55-74. Persons seeking work but not immediately available had the following age distribution: 0.7 million were aged 15-24, 1.3 million were aged 25-54 and 0.3 million were aged 55-74. Finally, among the 8.8 million persons available for work but not seeking it, 1.9 million were aged 15-24, 5.0 million were aged 25-54 and 1.8 million aged 55-74. There are fewer people in the age group 55-74 in all indicators.
Figure 4 shows the shares broken down by ten-year age groups between 15 and 74 years of age. The same information is also given by sex. The sum of the age groups in each bar chart equals 100 %.
The left-hand graph in Figure 4a shows the underemployed part-time workers by age group. The three 10-year age groups from 25 to 54 make up 71 % of all underemployed part-time workers. Younger persons aged 15-24 constitute 17 % of the total. Older persons comprise a much lower share: 11 % are aged 55-64 and 1 % are 65-74 year olds. This is probably linked with the fact that elder groups of people are less eager to work additional hours.
A simultaneous breakdown by age and sex reveals further differences in underemployed part-time workers. The shares among women are highest for age groups 35-44 (26 %) and 45-54 (27 %) (Figure 4a, center). It may be that women at this age still have children so young that they limit the mother's scope for involvement in the labour market. The shares are lower for younger women aged 25-34 (22 %) and 15-24 (15 %). Instead the shares among men are concentrated in the young age groups 15-24 and 25-34 (21 % and 27 % respectively), and decrease for older age groups (Figure 4a, at right).
As regards the indicator ‘persons seeking work but not immediately available’, the distributions for both women and men are skewed to the left i.e. to the younger age groups, with the distribution for men being more strikingly so. More than half of the men and women in this group are less than 35 years old, as 31 % of them are aged 15-24 and another 24 % are aged 25-34 (Figure 4b, at left). The downward trend continues to 19 % for ages 35-44, 16 % for 45-54, 11 % for 55-64 and less than 1.0 % for 65-74.
Compared to the other indicators, the age distribution of persons available but not seeking is more balanced: 22 % of the total are young people aged 15-24, who are only slightly more represented than the age groups 25-34, 35-44 and 45-54 (all around 20 %). 17 % are aged 55-64 and only 3 % are aged 65-74. A simultaneous breakdown by age and sex reveals some differences between women and men: among women the share is rather similar for each of the ten-year age groups 15 to 54 (all in the range between 18 % and 23 %), peaking in the ages 35-54 before decreasing to 16 % and 2 % in the last two age groups 55-64 and 65-74. By contrast, among men the share is highest for the age group 15-24 (27 %) and then stabilises between 15-19 % for ages 25-64.
By educational level
The educational level attained matters for labour force categories. Figure 5 shows data for the age group 25-74; the group aged 15-24 is excluded from this comparison because many of them have not yet attained their highest educational level.
As can be seen in Figure 5, 33 % of employed persons, not underemployed are highly educated. This share is 24 % among underemployed part-time persons. This is not as high as among other employed persons (i.e. not underemployed part-time), but it is higher than among the unemployed (19 %). A similar comparison of the share of low educated people for these three groups confirms that underemployed part-time workers rank between other employed persons and unemployed persons.
The share of highly educated people in the group 'persons seeking work but not immediately available' (22 %) is higher than among unemployed persons (19 %) and almost as high as the share among underemployed part-time workers (24 %). Finally, the group 'persons available but not seeking' has only a 13 % share of highly educated persons, a similar share as other economically inactive persons. The respective shares of low educated persons are also similar. Both groups are hence similar from the viewpoint of their composition by educational level.
Share of foreigners in underemployment twice their share in the total population
Foreigners are relatively more represented than nationals in the groups of underemployed part-time workers and persons seeking work but not immediately available. Foreigners are defined here as non-nationals of the country where they live, i.e. either nationals from another EU Member State or non-EU nationals.
Out of the 9.2 million underemployed part-time workers in the EU-27 in 2012, 1.3 million are not nationals of the country where they live (see Table 2, at left). They are overrepresented relative to their share in the population aged 15-74: they form 14 % of the underemployed whereas foreigners constitute only 7 % of the total population aged 15-74 in the EU-27 (see Table 2 at right). This indicates that proportionally more foreigners work in part-time jobs with fewer hours than they would like to work, possibly pointing to their either having to accept those jobs or to their being more eager to work additional hours to earn more.
Similarly, the share of foreigners among people seeking work but not immediately available is 12 %, significantly higher than their 7 % share of the total population.
Data sources and availability
All figures in this report are based on the EU Labour force survey (LFS).
Table 1 Figures in brackets have low reliability.':' colons are used for missing or extremely unreliable data. See EU-LFS publishing guidelines for details. Unemployment figures in this table differ from those published in online data codes: une_nb_a and une_rt_a because they do not cover French overseas departments and they are not adjusted to ensure consistent time-series.
Note that in relative terms the three indicators have different interpretations and it is explicitly not advised to add them to obtain a total. In particular, the relative figures for the two indicators persons seeking work but not immediately available and persons available but not seeking work are not shares because the numerator is not a subgroup of the denominator (persons in the numerators are not in the labour force, see Figure 2). Instead, the percentages for these two indicators show how much the current labour force could grow if joined by these people with a certain degree of labour market attachment. For its part, the indicator underemployed part-time workers as percentage of the labour force is a classical share because the numerator is a subgroup of the denominator.
These three indicators supplement the unemployment rate, thus providing an enhanced and richer picture than the traditional labour status framework, which classifies people as employed, unemployed or economically inactive, i.e. in only three categories. The new indicators create ‘halos’ around unemployment. This concept is further analysed in a Statistics in Focus publication titled 'New measures of labour market attachment’. That publication also explains the rationale of the indicators and provides additional insight as to how they should be interpreted. The supplementary indicators neither alter nor put in question the unemployment statistics standards used by Eurostat. Eurostat publishes unemployment statistics according to the ILO definition, the same definition as used by statistical offices all around the world. Eurostat continues publishing unemployment statistics using the ILO definition and they remain the benchmark and headline indicators.
Further Eurostat information
- 8.5 million underemployed part-time workers in the EU-27 in 2010 - Statistics in focus 56/2011
- New measures of labour market attachment - Statistics in focus 57/2011
- LFS main indicators (t_lfsi)
- LFS series - Detailed annual survey results (t_lfsa)
- LFS series - Specific topics (t_lfst)
- LFS main indicators (lfsi)
- Unemployment - LFS adjusted series (une)
- Supplementary indicators to unemployment, annual average, by sex and age groups (1 000 persons and %) (lfsi_sup_age_a)
- Supplementary indicators to unemployment, quarterly average, by sex and age groups (1 000 persons and %) (lfsi_sup_age_q)
- Supplementary indicators to unemployment, annual average, by sex and highest level of education attained (lfsi_sup_edu_a)
- Supplementary indicators to unemployment, quarterly average, by sex and highest level of education attained (lfsi_sup_edu_q)
- Supplementary indicators to unemployment, annual average, by sex and nationality (1000 persons) (lfsi_sup_nat_a)
- Unemployment - LFS adjusted series (une)