Underemployment and local employment dynamics: New evidence

Abstract

Workers in occupations that underutilize their experience, training, and skills are underemployed. Underemployment occurs for various reasons including productivity growth, spousal employment and income, family constraints, spatial restrictions, or personal preferences. Underemployment provides opportunities for selective job creation and economic growth. Using local employment dynamics (LED) and a statewide survey of the employed and nonworkers for 2004 and 2005, we examine the interaction between underemployment and LED. We show that poor local labor market conditions accentuate the perception of underemployment and lead to higher level of underemployment. Gender and ethnic differentials are also revealed in the characteristics of the underemployed. © Southern Regional Science Association 2011.