The Social Costs Of Underemployment

Going beyond the usual focus on unemployment, this 2004 book explores the health effects of other kinds of underemployment including forms of inadequate employment as involuntary part-time and poverty wage work. Using the National Longitudinal Survey of Youth, this compares falling into unemployment versus inadequate employment relative to remaining adequately employed. Outcomes include self-esteem, alcohol abuse, depression, and low birth weight. The panel data permit study of the plausible reverse causation hypothesis of selection. Because the sample is national and followed over two decades, the study explores cross-level effects (individual change and community economic climate) and developmental transitions. Special attention is given to school leavers and welfare mothers, and, in cross-generational analysis, the effect of mothers' employment on babies' birth weights. There emerges a way of conceptualizing employment status as a continuum ranging from good jobs to bad jobs to employment with implications for policy on work and health.

Underemployment – when people are employed in some way that is insufficient, such as being overqualified or working part-time when one desires full-time employment – is a challenge faced by all industrialized nations and their organizations and individuals. Just like unemployment, some level of underemployment exists even in the best of times, but it becomes more pervasive when the job market is weak. Given the current economic climate in North America and abroad, researchers and scholars in various disciplines (psychology, business, sociology, economics) are becoming more interested in investigating the effects of underemployment and identifying possible practical solutions. Underemployment synthesizes the current understanding of the phenomenon by bringing together scholars with diverse perspectives and expertise with the aim of informing and guiding the next generation of underemployment research.

This short note emphasizes and illustrates two basic points: (1) The private costs of unemployment, i.e., the costs borne by the unemployed themselves, vary substantially and are often extremely low. This low private cost is an important cause of the permanently high unemployment rate in the United States. (2) The social costs of unemployment, i.e., the costs of unemployment to the nation as a whole regardless of how they are distributed, must be judged by considering the specific policy by which a worker would be reemployed. It is wrong to regard unemployment as either without cost (because the unemployed enjoy the opportunity for job search and leisure) or as having a cost equal to lost output. Examples are given to show that output may overstate or understate true social cost, depending on the options available for reemployment

While our leaders celebrate Australia’s ‘economic miracle’, unemployment, particularly long-term unemployment, has become a permanent feature of Australia’s economic landscape. Its unacceptably high level has proved remarkably resistant in the face of sustained economic growth and increased prosperity. The adverse economic and social consequences of high unemployment are likely to leave long-term scars on those affected, as well as on local communities and the entire fabric of Australian society. Yet these effects rarely feature on the policy agenda, and the costs of unemployment remain largely invisible.

The last decade has witnessed a conspicuous alteration in policies protecting unemployed people in modern welfare states. Social policies are increasingly designed to encourage economic independence. Policy makers have introduced a wide range of reforms linking disability, unemployment, and welfare programs cash benefits to work-oriented measures.Welfare policies are being framed by a new emphasis on recipients' obligations, emphasizing that the receipt of benefits creates a responsibility to take action towards becoming self-reliant. The objective is to minimize the duration of dependence or improve the well-being of family or community. Activating the Unemployed addresses this growing interest in work-oriented measures. This represents a shift in the dominant discourse on social welfare from focus on the citizen's rights to social benefits to emphasis on their responsibilities to work and lead an active life. In this volume, a distinguished array of international contributors provide cross-cultural perspectives to analyze recent diverse policy initiatives to activate the unemployed in nine countries-Britain, France, Italy, the Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United States. Each provides a systematic account of the background, design, implementation, and results of employment-oriented measures. Collectively they permit comparison of organized responses to common problems in the areas of public assistance (welfare), unemployment, and disability, among others. Further chapters seek to broaden perspectives on policy options, the issues raised, and lessons learned in the course of activating the unemployed. This thorough and insightful account addresses significant contemporary issues and concerns about welfare, social security, and unemployment. It will aid policy makers, professionals, and scholars in assessing current trends in welfare in various countries throughout the world.