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CHAPTER 5. UNDEREMPLOYMENT
5.5 The concepts underpinning the international definition of time-related underemployment are shown in diagram 5.2. The framework classifies persons who satisfy each of the criteria outlined above - willingness to work additional hours (note that persons actively seeking additional hours of work are distinguished from those who are not); availability to work additional hours; and worked less than a threshold relating to working time - as time-related underemployed.
5.2 TIME-RELATED UNDEREMPLOYMENT: CONCEPTUAL FRAMEWORK
5.6 The current international standard also notes that:
INADEQUATE EMPLOYMENT SITUATIONS
5.7 Indicators of inadequate employment situations describe situations in the workplace which reduce the capacity and wellbeing of workers as compared to an alternative employment situation. However, as noted in the international standard, the statistical definitions and methods necessary to describe inadequate employment situations still have to be developed further. As such, the standard does not define inadequate employment situations. The international standard does, however, identify a number of inadequate employment situations for which countries may wish to consider producing separate indicators. These include:
DEFINITIONS USED IN ABS SURVEYS
5.8 For practical reasons, ABS measurement of underemployment is confined to time-related underemployment. The ABS underemployment framework is based on separating employed persons into two mutually exclusive groups:
5.9 Fully employed workers comprise: employed persons who worked full-time during the reference week (includes persons who usually work part-time); employed persons who usually work full-time but worked part-time in the reference week for non-economic (footnote 1) reasons; and part-time workers (usually work part-time and did so in the reference week (footnote 2) who do not want to work additional hours. Full-time workers who worked part-time in the reference week for non-economic reasons are considered to be fully employed because they usually work full-time, and worked part-time in the reference week voluntarily.
5.10 Persons who are not fully employed comprise: part-time workers (usually work part-time and did so in the reference week) who want to work more hours; and full-time workers who worked part-time in the reference week for economic reasons (footnote 3). Time-related underemployed workers (as defined in the ILO guidelines) are a subgroup of persons 'not fully employed'.
5.11 The ABS underemployment framework further classifies persons who are not fully employed according to whether they were looking for and/or available to start work with more hours, and according to the number of additional hours sought. The framework identifies: persons wanting full-time hours; persons wanting more part-time hours; persons who looked for extra work during the four weeks prior to the survey; and persons who were available to start extra work (either in the reference week or in the four weeks subsequent to the survey). It is assumed that full-time workers who worked part-time in the reference week for economic reasons wanted to work full-time in the reference week and would have been available to do so. The ABS underemployment framework is set out in diagram 5.3.
5.3 ABS UNDEREMPLOYMENT FRAMEWORK
COMPARISON OF ABS AND INTERNATIONAL DEFINITIONS
5.12 The ABS underemployment framework is consistent with the ILO concept of time-related underemployment, although the international standards do not specifically identify the group 'fully employed workers' as is the case in the ABS framework.
Worked less than a threshold relating to working time
5.13 The international definition of time-related underemployment includes a threshold relating to working time. Only persons actually working less than the threshold are included in statistics of time-related underemployment. The international standards do not specify the threshold to be used. Instead they suggest a number of alternative approaches which may be suitable.
5.14 The threshold used in the ABS underemployment framework is based on the boundary between full-time and part-time work. Only those employed persons actually working less than 35 hours in the reference week may be further classified as not fully employed. Persons actually working less than 35 hours in the reference week include part-time workers (persons who usually work part-time and did so in the reference week), as well as some full-time workers who actually worked part-time hours in the reference week for non-economic reasons. However, only full-time workers who worked part-time in the reference week for economic reasons are classified as not fully employed in the ABS framework. Those who worked part-time in the reference week for non-economic reasons are assumed to be fully employed, on the basis that they usually work full-time, and that they 'voluntarily' worked part-time in the reference week (see paragraphs 5.8 to 5.10).
5.15 Outlined in paragraph 5.6 is a recommendation contained in the international standards that countries endeavour to identify all workers willing and available to work additional hours, regardless of the hours actually worked during the reference period, i.e. involving relaxation of the threshold relating to working time. The ABS collected some information on employees' preferences for additional hours of work (irrespective of how many hours usually worked) in the 2000 and 2007 Survey of Employment Arrangements, Retirement and Superannuation. For further information on the 2000 and 2007 Survey of Employment Arrangements, Retirement and Superannuation see Chapter 23.
Willingness to work additional hours
5.16 In the ABS framework, willingness to work additional hours is tested by asking part-time workers whether they want to work additional hours. However, additional information on whether respondents have actively looked for additional hours of work is also collected using the same active job search criteria as used for determining unemployment. This information is used to distinguish those who have actively sought to work additional hours from those who have not. This approach is also consistent with the international standards.
Availability to work additional hours
5.17 In the ABS framework, availability to work additional hours is determined both in terms of immediate availability (i.e. available in the reference week), and availability within the following four weeks. The international guidelines are not prescriptive on this issue.
Volume of time-related underemployment
5.18 As outlined in paragraph 5.6, the international standards state that countries may wish to estimate the volume of time-related underemployment. In the annual Labour Force Survey supplementary topic, Underemployed Workers (see paragraph 5.23), information is collected about usual hours worked and preferred number of extra hours, enabling estimates of the total number of additional hours wanted per week to be compiled.
5.19 Estimates of persons not fully employed are available from:
LABOUR FORCE SURVEY
5.20 The Labour Force Survey collects information on underemployment on a quarterly basis. The survey classifies workers according to the framework outlined above with the following restriction:
5.21 The criteria used in the Labour Force Survey are analogous to the criteria for determining unemployment (that is, actively looking for work and available for work in the reference week). Additional information is also available on full-time workers who usually work part-time hours including: whether want more hours of work; whether looking for more hours of work; and whether available to start more hours of work in the reference week.
5.22 For more information on the content and methodology of the Labour Force Survey, see Chapter 20.
SUPPLEMENTARY SURVEY: UNDEREMPLOYED WORKERS
5.23 The annual Labour Force Survey supplementary topic, Underemployed Workers, is the primary ABS data source on underemployment. The survey classifies workers according to the framework outlined above, comparable with ICLS 1998 and the Labour Force Survey quarterly measure, but with a much wider range of information, for example, on the number of hours usually worked, number of preferred hours, steps taken to find work, and difficulties finding work. For more information on the content and methodology of this survey, see Chapter 21.14.
5.24 For further details contact the Labour Market Statistics Section in Canberra on (02) 6252 7206 or email <firstname.lastname@example.org>
1. Non-economic reasons include: illness or injury; leave, holiday or flextime; and personal reasons.<back
2. For further information on the full-time/part-time employment classification refer to Chapter 4. <back
3. Economic reasons include being stood down, or insufficient work being available. <back