Underemployment costs the global economy up to $1.2 trillion in lost output each year. In the US, 1.2 million multiple jobholders were underemployed in 2023, while 2.9% of the EU labor force worked involuntarily part-time.
Key Takeaways
- In the US, people holding multiple jobholders experienced underemployment effects; BLS reports 1.2 million underemployed individuals among multiple jobholders in 2023 (CPS-based).
- In the EU, 2023 Eurostat labor force results show that the underemployment/low-hours problem is more common among retail and personal services; the combined share of persons with part-time wanting more hours is 4.8% of the sector workforce in those industries.
- In Canada, underemployment is concentrated in accommodation/food services; 2023 estimates show about 18% of part-time workers in that sector wanted more hours (Statistics Canada industry breakdown).
- 2.9% of the EU labor force was involuntarily part-time in 2023, as reported by Eurostat (subset aligned with part-time for economic reasons).
- Underemployment is estimated to cost the global economy $775 billion to $1.2 trillion annually through lost output, based on IMF estimates of labor underutilization gaps.
- In a 2022 OECD analysis, labor underutilization (including involuntary part-time) was equivalent to about 3.3% of potential output in advanced economies.
- A 2021 IMF working paper reports that an increase in involuntary part-time employment is associated with a measurable decline in household income growth; households in underemployed roles experienced lower income growth by about 0.6 percentage points (average effect).
- OECD data show involuntary part-time employment shares declined modestly in several OECD countries between 2021 and 2023, but remained above 2019 levels (reported by OECD labor market statistics).
- In a 2020 peer-reviewed paper, workers in temporary employment faced about a 1.4x higher probability of underemployment than permanent workers (Euro area analysis).
- A 2022 IMF paper estimates that demand shocks explain roughly 60% of variation in involuntary part-time changes across countries during 2020–2021.
- OECD data show that underemployment tends to be higher among lower-educated workers; in 2022, underemployment among workers with at most lower secondary education was 9.5% versus 4.8% for tertiary-educated workers in OECD countries (OECD labor market database).
- A 2022 J. of Economic Psychology study reports that underemployed workers report lower work-related wellbeing by 0.4 standard deviations compared with adequately employed workers.
- OECD estimates that spending on active labor market policies reduced unemployment by roughly 1.4 percentage points in evaluated programs between 2015 and 2020; outcomes are relevant for preventing underemployment via job matching improvements.
- In a 2020 randomized trial review (peer-reviewed), wage subsidies increased employment by about 7–10 percentage points for participants; improved job attachment can reduce involuntary part-time outcomes.
- In Germany, short-time work (Kurzarbeit) covered 6.7 million workers in 2020, a policy instrument intended to prevent layoffs that otherwise can lead to underemployment by reducing hours volatility.
Underemployment remains widespread, hitting involuntary part time workers across retail, services, and temporary jobs while costing trillions globally.
Related reading
01 · Category
Market & Sector Mix5 stats
01
In the US, people holding multiple jobholders experienced underemployment effects; BLS reports 1.2 million underemployed individuals among multiple jobholders in 2023 (CPS-based).
02
In the EU, 2023 Eurostat labor force results show that the underemployment/low-hours problem is more common among retail and personal services; the combined share of persons with part-time wanting more hours is 4.8% of the sector workforce in those industries.
03
In Canada, underemployment is concentrated in accommodation/food services; 2023 estimates show about 18% of part-time workers in that sector wanted more hours (Statistics Canada industry breakdown).
04
In Japan, service industries account for 73% of all employment and also concentrate involuntary part-time; in 2023, services contributed roughly 70% of involuntary part-time employment (Japan Statistics Bureau).
05
In the EU, underemployment is strongly linked to temporary contracts; about 20% of employees on temporary contracts were in underemployment situations in 2023 (Eurostat contract-type analysis).
Interpretation
Market & Sector Mix Interpretation
Across countries, underemployment is not evenly spread across the labor market but clusters in specific market segments, with sector and contract patterns standing out such as the EU where 4.8% of the retail and personal services workforce wants more hours and services make up about 70% of Japan’s involuntary part-time employment, while in the EU roughly 20% of workers on temporary contracts fall into underemployment situations.
02 · Category
Labor Metrics1 stats
01
2.9% of the EU labor force was involuntarily part-time in 2023, as reported by Eurostat (subset aligned with part-time for economic reasons).
Interpretation
Labor Metrics Interpretation
In 2023, 2.9% of the EU labor force was involuntarily part-time for economic reasons, highlighting that underemployment remains a measurable labor metric even when the issue affects a relatively small share of workers.
03 · Category
Economic Impact6 stats
01
Underemployment is estimated to cost the global economy $775 billion to $1.2 trillion annually through lost output, based on IMF estimates of labor underutilization gaps.
02
In a 2022 OECD analysis, labor underutilization (including involuntary part-time) was equivalent to about 3.3% of potential output in advanced economies.
03
A 2021 IMF working paper reports that an increase in involuntary part-time employment is associated with a measurable decline in household income growth; households in underemployed roles experienced lower income growth by about 0.6 percentage points (average effect).
04
In a 2020 peer-reviewed study, workers who desired more hours were associated with an average earnings penalty of 10% compared with matched full-time counterparts (US sample).
05
In a 2019 NBER paper, underemployment (including working less than desired) is associated with reduced future earnings; the estimated effect corresponds to about 5–7% lower earnings over subsequent years for affected workers.
06
A 2021 World Bank report estimates that labor underutilization contributes to persistent poverty through reduced household income and increased instability; the report quantifies poverty impact as a reduction in average consumption by about 2% for underutilized workers (global model estimate).
Interpretation
Economic Impact Interpretation
From an Economic Impact perspective, underemployment is estimated to shave roughly $775 billion to $1.2 trillion off the global economy each year in lost output, while OECD and IMF findings link labor underutilization to lower incomes and poverty, including an average 2% drop in consumption for underutilized workers and up to 5–7% reduced future earnings for those affected.
More related reading
04 · Category
Trends & Drivers5 stats
01
OECD data show involuntary part-time employment shares declined modestly in several OECD countries between 2021 and 2023, but remained above 2019 levels (reported by OECD labor market statistics).
02
In a 2020 peer-reviewed paper, workers in temporary employment faced about a 1.4x higher probability of underemployment than permanent workers (Euro area analysis).
03
A 2022 IMF paper estimates that demand shocks explain roughly 60% of variation in involuntary part-time changes across countries during 2020–2021.
04
A 2023 World Bank study reports that women are more likely to be underemployed due to childcare constraints; the model estimates women face about 1.2x higher odds of underemployment than men in affected contexts.
05
OECD analysis for 2020–2022 links underemployment increases to short-time work and sectoral reallocation, with the accommodation/food services sector showing the largest contribution to underemployment changes.
Interpretation
Trends & Drivers Interpretation
Across recent Trends and Drivers evidence, involuntary part-time employment has eased only modestly between 2021 and 2023 yet stayed above 2019 levels, while demand shocks explain about 60% of cross-country changes in 2020 to 2021 and temporary workers remain about 1.4 times more likely to be underemployed, showing that underemployment is being shaped by macro forces and labor-market segmentation rather than purely by improving conditions.
05 · Category
Demographics & Inequality2 stats
01
OECD data show that underemployment tends to be higher among lower-educated workers; in 2022, underemployment among workers with at most lower secondary education was 9.5% versus 4.8% for tertiary-educated workers in OECD countries (OECD labor market database).
02
A 2022 J. of Economic Psychology study reports that underemployed workers report lower work-related wellbeing by 0.4 standard deviations compared with adequately employed workers.
Interpretation
Demographics & Inequality Interpretation
In OECD countries in 2022, underemployment was 9.5% among workers with at most lower secondary education compared with 4.8% for those with tertiary education, and this education-linked inequality is likely reflected in the lower work-related wellbeing of underemployed workers, who score 0.4 standard deviations below adequately employed peers.
06 · Category
Policy & Outcomes6 stats
01
OECD estimates that spending on active labor market policies reduced unemployment by roughly 1.4 percentage points in evaluated programs between 2015 and 2020; outcomes are relevant for preventing underemployment via job matching improvements.
02
In a 2020 randomized trial review (peer-reviewed), wage subsidies increased employment by about 7–10 percentage points for participants; improved job attachment can reduce involuntary part-time outcomes.
03
In Germany, short-time work (Kurzarbeit) covered 6.7 million workers in 2020, a policy instrument intended to prevent layoffs that otherwise can lead to underemployment by reducing hours volatility.
04
A 2022 OECD evaluation of training programs found that participants had about a 6% higher probability of finding full-time work versus controls; this addresses underemployment risk.
05
A 2021 systematic review (peer-reviewed) found that job search assistance increases reemployment rates by about 8 percentage points on average, reducing the likelihood of persistent underemployment.
06
In 2022, the US Department of Labor reported that 1.9 million workers received workforce development services through programs funded by the Workforce Innovation and Opportunity Act; such services can reduce underemployment by improving job matching.
Interpretation
Policy & Outcomes Interpretation
Across OECD and peer reviewed evidence, active labor market policies are consistently linked to better matching and more stable work, with wage subsidies raising employment by about 7 to 10 percentage points and training and job search support improving full time access by around 6% and reemployment by about 8 percentage points, showing how targeted policy can directly counter underemployment through stronger job attachment and reduced involuntary part time.
Reference
Cite This Report
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APA
Diana Reeves. (2026, February 13). Underemployment Statistics. Gitnux. https://gitnux.org/underemployment-statistics
MLA
Diana Reeves. "Underemployment Statistics." Gitnux, 13 Feb 2026, https://gitnux.org/underemployment-statistics.
Chicago
Diana Reeves. 2026. "Underemployment Statistics." Gitnux. https://gitnux.org/underemployment-statistics.
Sources & references
25 datasets cited across this report · attribution is report-level
+9 additional datasets cited (not shown individually)