Underemployment means people can’t get the hours, schedules, or job conditions they need—and the impact shows up in different forms across regions. In the US it’s often linked to juggling multiple jobs, while in the EU and Canada it concentrates in retail and personal services, and in accommodation or food services. Japan’s underemployment is closely tied to the service sector and involuntary part-time work.
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 affects millions globally, costing up to $1.2 trillion annually, and hits services, women, and low educated workers hardest.
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 markets and sectors, underemployment tends to cluster in service oriented and lower hour work, from the 1.2 million underemployed people reported in the US among multiple job holders to the EU’s finding that roughly 20% of workers on temporary contracts were underemployed and Canada’s estimate that about 18% of part time workers in accommodation and food services faced the issue.
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 reported being involuntarily part-time, underscoring that even within labor metrics the problem of underutilized work still affects a measurable share of workers for economic reasons.
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
Economic impact studies show underemployment is not just a labor-market issue but a major drag on growth, with estimates ranging up to $775 billion to $1.2 trillion a year in lost global output and labor underutilization amounting to about 3.3% of potential output in OECD analysis, feeding through to lower household earnings and persistent poverty.
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 2021 to 2023, involuntary part-time fell modestly in several OECD countries and the 2022 IMF suggests demand shocks account for about 60% of cross-country shifts, showing that underemployment trends are still being driven mainly by labor market demand conditions rather than just individual labor supply choices.
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
Underemployment is concentrated among lower-educated workers, with OECD data showing higher rates in 2022 for those with at most lower educational attainment, and a 2022 study finds that the underemployed have work-related wellbeing 0.4 standard deviations lower, underscoring a clear Demographics and Inequality pattern.
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
Under the Policy and Outcomes angle, evidence from multiple evaluations shows that active labor market measures can materially improve employment outcomes, cutting unemployment by about 1.4 percentage points and boosting outcomes further through wage subsidies that raise employment by roughly 7 to 10 percentage points and job search assistance that increases reemployment by around 8 percentage points on average.
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)