The Key Difference Between Unemployment and Underemployment Rate
Feature |
Unemployment Rate |
Underemployment Rate |
Definition |
Percentage of the labor force that is actively seeking work but currently without a job. |
Percentage of employed individuals working less than they would like or in jobs below their skill level. |
Measurement |
Calculated by dividing the number of unemployed by the total labor force. |
Measured by counting workers working part-time involuntarily or in mismatched roles. |
Focus |
Focuses on those without any job but actively looking for one. |
Focuses on workers who are employed but underutilized. |
Economic Implication |
Indicates the availability of jobs and economic health. |
Indicates inefficiencies in the labor market and skills mismatch. |
Examples |
Recent graduates searching for jobs, laid-off workers. |
Part-time workers wanting full-time jobs, graduates working in unrelated fields. |
Policy Response |
Policies focus on job creation and unemployment benefits. |
Policies focus on skills training and improving job quality. |
unemployment vs underemployment rate
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