Unemployment – underemployment

The usual indicator of the extent of underemployment is the unemployment rate. Underemployment, however, is like an iceberg, of which only the part visible above water is measured by the unemployment rate. In recent decades, criticism of the traditional concepts of measuring unemployment has increased. This is no coincidence! Especially in the less developed countries with their high shares of informal employment, unemployment rates have little meaning. In these countries, few underemployed people are eligible for unemployment benefits and thus have an opportunity and incentive to register as unemployed. There is now widespread agreement that there is no “one right indicator” to capture the different forms of underemployment in the labour market, but that one needs several indicators. It is shown that the ILO’s goal of developing a globally comparable system of indicators in its decent work agenda an only be achieved to a limited extent due to the different significance of the same statistical indicators in developed and less developed countries.