History

The problem of how to define and measure underemployment has been discussed by the International Conference of Labour Statisticians (International Conference of Labour Statisticians) on seven occasions. The first time was in1925, when the Second International Conference of Labour Statisticians considered the topic together with unemployment statistics. Underemployment was then viewed as a problem of reduced working hours. In 1947, the Resolution on employment and unemployment adopted by the Sixth International Conference of Labour Statisticians explicitly mentioned the need to measure underemployment but provided no definition. In 1954 the Eighth International Conference of Labour Statisticians had before it a first proposal to define underemployment but did not adopt it. The proposal was the following:

“2. Persons in under-employment consist of all employed persons who during a specified period work less than 35 hours a week and who wish to work additional hours.”

It was not until 1957 that the Ninth International Conference of Labour Statisticians adopted the first international statistical definition of underemployment, viewed as a problem not only of reduced hours of work but also of reduced income as a result of inadequate technology, misuse of skills and low productivity. The report to the Ninth International Conference of Labour Statisticians, and the resolution adopted by it, established the foundations for current international standards. The international definition of underemployment was later revised by the Eleventh International Conference of Labour Statisticians in 1966, and after that by the Thirteenth International Conference of Labour Statisticians in 1982.

The international definition of time-related (or “visible”) underemployment has changed little over time. The first definition ever proposed for international standard setting (to the Eight International Conference of Labour Statisticians in 1954), was based on short hours of work and on the workers' willingness to work more time. Similarly, the first international definition of “visible” underemployment, adopted by the Ninth International Conference of Labour Statisticians in 1957, was also based on short hours of work and on the workers' willingness and abilities to work more time:

4. Visible underemployment refers to persons who are in employment of less than normal duration and who are seeking or would accept additional work.
5. The normal duration of work to be used as a basis of comparison in identifying persons in employment of less than normal duration may be the duration of work laid down by law or in collective agreements or the duration of work which may be otherwise determined by the country concerned as representative of normal employment in the occupation, branch of economic activity or region concerned.”

A Meeting of Experts which met in 1963 to prepare the revision of the international definition in 1966 introduced the notion of the involuntary nature of the short time work which, although disregarded by the Eleventh International Conference of Labour Statisticians, was later retaken by the Resolution adopted by the 13th International Conference of Labour Statisticians, as follows:

“18. (1) Persons visibly underemployed comprise all persons in paid or self-employment, whether at work or not at work, involuntarily working less than the normal duration of work determined for the activity, who were seeking or available for additional work during the reference period.
(2) For the purpose of classifying persons as visibly underemployed, normal duration of work for an activity should be determined in the light of national circumstances as reflected in national legislation to the extent it is applicable, and usual practices in other cases, or in terms of a uniform conventional norm.”

The involuntary nature of the short time work was dropped in current standards given the lack of international agreement on the reasons that qualify as involuntary: even the resolution adopted by the 13th ICLS could not recommend a set of reasons to be considered as involuntary. Partly this is due because voluntary reasons may be involuntary reasons in disguise and vice versa. Persons who report that they worked less than normal because of family responsibilities may have opted for these activities because they were unable to find more work in the first place. There may also be persons who although originally working short hours for personal reasons now desire more working hours but continue to declare the original (voluntary) reason for working short hours. Conversely, persons may report economic reasons for working short hours even if at present they are not willing to work additional hours. A final reason was that the involuntary nature of short time work does not comply with the activity principle of the labour force framework, whereby persons need to do or have the intention of doing something to be included in one of its population categories, irrespective of whether they are in a specific situation or have certain attributes.

Regarding other forms of inadequate employment situations, previous international standards on the subject had never managed to adopt a definition which could be used for measurement purposes. Only the 9th International Conference of Labour Statisticians had discussed a definition of “invisible” underemployment which attempted to lend itself for measurement. The proposal to this International Conference of Labour Statisticians identified three variables which were to reflect the intensity (or productivity) with which work was performed. These variables are still present in current standards and relate to income, skills and the establishment's productivity. It had also identified a set of thresholds against which to compare the workers’ income, skills and productivity to determine "invisible" underemployment: income was to be compared to the minimum wage rate or usual practices regarding wages; the skills (required by the job) to the occupational skills of the worker; and the establishment's productivity to the average productivity of efficient establishments. Additionally, in the proposal, persons in “invisible” underemployment were required to be willing (i.e. seek) or be able (i.e. ready) to accept a post with normal work conditions. The proposal, however, was not retained by the 9th International Conference of Labour Statisticians, which adopted instead a definition of “invisible” underemployment solely on the basis of comparisons with thresholds.

The Meeting of Experts of 1963 introduced the notion that the types of employment inadequacies mentioned by the 9th International Conference of Labour Statisticians (i.e. skill, income and productivity) were not exhaustive nor mutually exclusive, and identified other characteristics, including the lack of labour mobility, lag in development, institutional rigidities and social attitudes. Perhaps due to the consideration of these variables, the Meeting of Experts suggested that "invisible" underemployment would need to be described through analytical procedures. This suggestion was retained by the Resolution adopted by the 11th International Conference of Labour Statisticians, which recommended the use of indirect indicators to describe potential underemployment and by the Resolution adopted by the 13th International Conference of Labour Statisticians, which stated that

“16. (2) Invisible underemployment is primarily an analytical concept reflecting a misallocation of labour resources or a fundamental imbalance as between labour and other factors of production. Characteristic symptoms might- be low income, underutilisation of skill, low productivity. Analytical studies of invisible underemployment should be directed to the examination and analysis of a wide variety of data, including income and skill levels (disguised underemployment) and productivity measures (potential underemployment).”