Underemployment and potential additional labour force statistics

From Statistics Explained

Data from October 2014. Most recent data: Further Eurostat information, Main tables and Database.
Figure 1: Non-seasonally adjusted unemployment rate and new supplementary indicators, EU-28, age 15-74
Source: Eurostat (lfsq_pganws)and (lfsi_sup_age_q))
Table 1: Non-seasonally adjusted unemployment and supplementary indicators by Member State, 2014Q2
Source: Eurostat (lfsq_pganws)and (lfsi_sup_age_q))
Figure 2: ILO labour statuses and new supplementary indicators, EU-28, age 15-74, 2013
Source: Eurostat (lfsi_sup_age_a)and (lfsa_pganws)
Figure 3: Gender distribution in selected labour categories, age 15-74, EU-28, 2013
Source: Eurostat (lfsi_sup_age_a)and (lfsa_pganws)
Figure 4: New indicators by gender and age group, %, EU-28, 2013
Source: Eurostat (lfsi_sup_age_a)
Figure 5: Persons in labour categories by educational level, shares of total persons in each category, age 25-74, EU-28, 2013
Source: Eurostat (lfsi_sup_edu_a)
Table 2: Labour status by nationality, persons and shares, age 15-74, EU-28, 2013, million persons
Note: Persons not reporting their nationality are not included in Table 1; therefore the total population 15-74 does not match Figure 2.
Source: Eurostat (lfsi_sup_nat_a)

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.

Main statistical findings

Recent developments at European and Member State level

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.

Firstly, the three indicators supplementing unemployment have by construction looser requirements than unemployment itself, because they look at groups of persons who do not simultaneously fulfil 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 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 fairly steady outflow of students finishing their studies 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 2014Q2, underemployed part-time work is highest in Cyprus (8.1 % of the labour force), Spain (7.2 %) and Ireland (6.0 %). The lowest rates were measured in the Czech Republic (0.7 %), Bulgaria and Estonia (0.9 % each). Compared to the situation one year before, the increase was particularly high in Cyprus (+2.0 percentage points) and Slovenia (+0.7 pp). Several countries, in particular Latvia (-1.2 pp), Ireland and Malta (-0.9 pp each) have however less underemployed part-time workers than in 2013Q2. The indicator 'persons seeking work but not immediately available' is highest in Sweden (3.8 % of the labour force) and Finland (3.0 %) and lowest in Hungary (0.3 %) and the Czech Republic (0.4 %). Compared to 2013Q2, this indicator remains very stable in almost all Member States, with only Croatia (+0.3 pp) showing an increase above 0.2 pp, and only Belgium (-0.3 pp) showing a decrease above 0.2 pp. Finally, the indicator 'persons available but not seeking' is the one showing the highest differences among Member States. While the ratio is very high in Italy (12.6 %) and Croatia (8.3 %), it reaches only 0.7 pp in Lithuania and 1.1 pp in the Czech Republic. Compared to the situation one year before, the highest increase was in Slovenia (+1.4 pp), and the largest decrease in Croatia (-2.5 pp).


A detailed look at 2013

In the EU-28 in 2013 there were 10.0 million underemployed part-time workers, 2.2 million jobless persons seeking a job but not immediately available for work, and 9.3 million persons available for work but not seeking it (see Figure 2).


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-28 in 2013) and in employment (54.2 %) (see Figure 3). Among the supplementary indicators, the predominance of women is strongest in the group of underemployed part-time workers. Two thirds of them are women (66.3 %) in the EU-28 in 2013: 6.6 million women compared with 3.4 million men. This imbalance mirrors the gender gap in part-time employment (whether underemployed or not), as 74.0 % of all part-time workers in the EU-28 in 2013 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 (29.5 %, i.e. 3.4 million out of 11.4) than among women (20.4 %, i.e. 6.6 million out of 32.4).

There is a majority of women among persons seeking work but not immediately available (54.9 % i.e. 1.2 million women compared with 1.0 million men), and among persons available for work but not seeking it (57.4 %, i.e. 5.3 million women and 4.0 million men).

A closer look at the age distribution

Out of the 10.0 million underemployed part-time workers in the EU-28 in 2013, 1.6 million were aged 15-24, 7.1 million were aged 25-54 and 1.2 million were aged 55-74. Persons seeking work but not immediately available had the following age distribution: 0.7 million were aged 15-24, 1.2 million were aged 25-54 and 0.3 million were aged 55-74. Finally, among the 9.3 million persons available for work but not seeking it, 2.0 million were aged 15-24, 5.4 million were aged 25-54 and 2.0 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 72 % of all underemployed part-time workers. Younger persons aged 15-24 constitute 16 % of the total. Older persons comprise a much lower share: 11 % are aged 55-64 and 1 % 65-74. 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 (14 %). In contrast the shares among men are concentrated in the young age groups 15-24, 25-34 and 35-44 (21 %, 26 % and 21 % 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 30 % of them are aged 15-24 and another 23 % 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: 21 % 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 4 % are aged 65-74. A simultaneous breakdown by age and sex reveals some differences between women and men: among women the share is fairly similar for each of the ten-year age groups 15 to 54 (all in the range between 18 % and 23 %), peaking in the ages 45-54 before decreasing to 17 % and 3 % 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 (26 %) 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, 34 % of employed persons, not underemployed are highly educated. This share is 25 % 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 (20 %). 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' (24 %) is higher than among unemployed persons (20 %) and almost as high as the share among underemployed part-time workers (25 %). Finally, the group 'persons available but not seeking' has only a 14 % share of highly educated persons, a similar share to 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 10.0 million underemployed part-time workers in the EU-28 in 2013, 1.4 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-28 (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 break-free 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.

Context

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.

See also

Further Eurostat information

Publications

Main tables

LFS main indicators (t_lfsi)
LFS series - Detailed annual survey results (t_lfsa)
LFS series - Specific topics (t_lfst)

Database

LFS main indicators (lfsi)
Unemployment - LFS adjusted series (une)
Supplementary indicators to unemployment by sex and age groups - annual average (1 000 persons and %) (lfsi_sup_age_a)
Supplementary indicators to unemployment by sex and age groups - quarterly average (1 000 persons and %) (lfsi_sup_age_q)
Supplementary indicators to unemployment by sex and highest level of education attained - annual average (lfsi_sup_edu_a)
Supplementary indicators to unemployment by sex and highest level of education attained - quarterly average, (lfsi_sup_edu_q)
Supplementary indicators to unemployment by sex and nationality - annual average (lfsi_sup_nat_a)

Dedicated section

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