Undercover Unemployment

Undercover unemployment occurs when there are people who have a job but their productive capacity is being underused.

People affected by undercover unemployment are not registered as part of the country’s unemployment data, however, they are in a job well below their capabilities and therefore their productivity is limited. In favorable economic conditions, these people should be able to find a job where they can generate a higher output and receive a higher salary in return .

Origin of the concept

The concept of undercover unemployment for the first time used in the 1930s by economist Joan Robinson to refer to the group of workers who, because of the economic crisis , were in jobs where they were over-qualified. In this way, there was a loss of efficiency and productivity because these workers could contribute much more in another occupation more related to their skills.

In simple terms, workers part of undercover unemployment are part of the mass of active workers but their marginal productivity is small. There is an unemployment of human resources that is not reflected in the statistics.

Causes of undercover unemployment

Among the causes are:

  • People whose jobs correspond to a lower category with respect to the necessary qualifications
  • Excessively short work hours (workers do not take up all the time they could or would like to)

Undercover Unemployment Detection

Some authors have pointed out that one way to detect people affected by undercover unemployment is to see if the salary that the worker currently receives is substantially lower than what he received in his previous job. Some of the explanations for this fact would be that: a) the job position is of a lower level and / or b) work hours have been significantly reduced.

by Abdullah Sam
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