unemployment, condition of one who is able to work but unable to find work. Once assumed to be voluntary, idleness was punishable by law; however it is now recognized that unemployment often arises from factors beyond the control of the individual worker. Unemployment may be due to seasonal layoffs (e.g., in agricultural jobs), technological changes in industry (particularly by increased automation), racial discrimination, lack of adequate skills by the worker, or fluctuations in the economy. For the purposes of government statistics, a unemployed person is someone who is without a job and actively looking for work; a person without a job who is not looking or has stopped looking for work is not counted as unemployed. The unemployment rate thus is not an indicator of the percentage of people of working age who do not have jobs. The term underemployment is often used to describe the condition of those who work part-time because full-time jobs are unavailable or who are employed at less-skilled work than they are qualified to do.

In developing countries, unemployment is often caused by the urban migration that generally precedes the industrial development needed to employ those migrants. In industrial nations, increases in unemployment are the result of economic slowdowns, recessions, or depressions. In the Great Depression of the 1930s unemployment rose to 25% of the workforce in Germany, Great Britain, and the United States. Similar rates occurred in Greece and Spain, due in part to different causes, during the early 2010s.

In the post–World War II era most of W Europe and Japan generally kept their unemployment levels below 3%, and by the late 1960s the rate in the United States, where there had been far more fluctuation, was down to less than 4%. Since the 1970s, however, worldwide economic changes have generally kept the U.S. unemployment rate above 5%. It was greater than 10% in 1982, the highest rate since 1940, and the rate was considerably higher among nonwhite minorities and the young, approaching 50% among African-American teenagers in urban areas. By 1990 the average unemployment rate had dropped to almost 5%. It fluctuated between 5% and 7% for most of the 1990s but dropped to around 4% by 1999 before a recession (2001) led it to rise to 6.3% in mid-2003. It subsequently dropped to 5% by mid-2005 and hovered between 4.8% and 4.4% for most of 2006–7. By late 2009, however, it had risen to 10.1% as a result of the deepest recession since the early 1980s. It gradually dropped to below 6% by late 2014 and to nearly 4% by late 2017. At the same time, however, many people left the workforce during much of that period and were not counted in the employment figures. Underemployment and unemployment combined exceeded 17% in 2009, the worst such rate since at least the 1970s and perhaps since the Great Depression.

As Keynesian economics (see Keynes, John Maynard) gained influence among policymakers, more countries committed themselves to finding ways to approach full employment through government intervention. Governments, in addition to trying to increase employment opportunities by stimulating business, have also taken other measures to deal with the problem. In the United States, the Social Security Act of 1935 and the Employment Act of 1946 represented moves in this direction; in Great Britain, labor exchanges were set up and a contributory unemployment insurance system established. Under the Communist economic systems of the Soviet Union and the People's Republic of China, attempts were made to eliminate unemployment by socializing the means of production and distribution and by directing labor into more productive channels, but their governments typically proved unable to reallocate labor appropriately, leading instead to unneeded production or underemployment. The disintegration of the USSR and economic liberalization in China ended such efforts.


See C. A. Greenhalgh, ed., The Causes of Unemployment (1983); D. N. Ashton, Unemployment under Capitalism (1986); J. Hudson, Unemployment after Keynes (1988); L. H. Summers, Understanding Unemployment (1989); R. Vedder and L. Gallaway, Out of Work: Unemployment and Government in 20th Century America (1993).

The Columbia Encyclopedia, 6th ed. Copyright© 2018, The Columbia University Press.

Underemployment: Selected full-text books and articles

The Nation's Underemployed in the "Great Recession" of 2007-09 By Sum, Andrew; Khatiwada, Ishwar Monthly Labor Review, Vol. 133, No. 11, November 2010
Toward a More Comprehensive Measure of Labor Underutilization: The Alabama Case By Addy, Samuel N.; Bonnal, Michael; Lira, Cristina Business Economics, Vol. 47, No. 3, July 2012
Peer-reviewed publications on Questia are publications containing articles which were subject to evaluation for accuracy and substance by professional peers of the article's author(s).
The Underemployment Puzzle: The Effects of Overqualification and Involuntary Part-Time Status on Volunteering By Collins, Brian K.; Long, Laurie Public Administration Quarterly, Vol. 39, No. 4, Winter 2015
Peer-reviewed publications on Questia are publications containing articles which were subject to evaluation for accuracy and substance by professional peers of the article's author(s).
An Equity-Based Redefinition of Underemployment and Unemployment and Some Measurements By Lester, Bijou Yang; McCain, Roger A Review of Social Economy, Vol. 59, No. 2, June 2001
Peer-reviewed publications on Questia are publications containing articles which were subject to evaluation for accuracy and substance by professional peers of the article's author(s).
Nonmetropolitan America in Transition By Amos H. Hawley; Sara Mills Mazie University of North Carolina Press, 1981
Librarian's tip: Chap. 9 "Unemployment and Underemployment"
Demographics: A Casebook for Business and Government By Hallie J. Kintner; Thomas W. Merrick; Peter A. Morrison; Paul R. Voss Rand, 1997
Librarian's tip: Chap. 20 "Documenting State Underemployment Patterns"
Investing in People: The Human Capital Needs of Rural America By Lionel J. Beaulieu; David Mulkey Westview Press, 1995
Librarian's tip: Chap. 9 "Gender Differences in Human Capital in Rural America"
Does "Trickle Down" Work? Economic Development Strategies and Job Chains in Local Labor Markets By Joseph Persky; Daniel Felsenstein; Virginia Carlson W.E. Upjohn Institute for Employment Research, 2004
Librarian's tip: "Underemployment and Labor Markets" begins on p. 13 and Appendix A: "Unemployment and Underemployment" begins on p. 131
International Migration: Prospects and Policies in a Global Market By Douglas S. Massey; J. Edward Taylor Oxford University Press, 2003
Librarian's tip: Chap. 8 "Immigrants in the U.S. Economy "
The Keynesian Theory of Economic Development By Kenneth K. Kurihara George Allen & Unwin, 1959
Monetary Policies and Full Employment By William Fellner University of California Press, 1946
Supporting Lifelong Learning By Richard Edwards; Nod Miller; Nick Small; Alan Tait RoutledgeFalmer, vol.3, 2002
Librarian's tip: "Underemployment and the Myth of the 'Knowledge Economy'" begins on p. 58
Trade Policy in Developing Countries By Edward F. Buffie Cambridge University Press, 2001
Librarian's tip: Chap. 5 "Underemployment, Underinvestment, and Optimal Trade Policy"
Work-Family Challenges for Low-Income Parents and Their Children By Ann C. Crouter; Alan Booth Lawrence Erlbaum Associates, 2004
Librarian's tip: Chap. 3 "Beyond Low Wages: Underemployment in America"
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