VOLUME UNDERUTILISATION

Labour underutilisation can be measured in a number of ways - in either population or hours based estimates. The population based, or headcount measures, give an indication of the proportion of the population affected by labour underutilisation. The hours based, or volume measures, quantify the hours of available labour that are unutilised, and may be more relevant in analysing the spare capacity of the labour force.

Whether people are unemployed or underemployed, not all people in search of work (or more work) require the same number of hours of work. For example, consider two underemployed workers. One works 15 hours a week but would prefer to work 35 hours, while the other works 25 hours a week but would prefer to work 30. Both would be counted as underemployed and contribute equally to the headcount underutilisation rate. However, the fact that one is willing to work an additional 20 hours per week and the other only an additional 5 hours would be reflected in the volume labour force underutilisation rate.

The volume labour force underutilisation rate declined from 7.9% in 2002 to 5.3% in 2008 before rising to 7.7% in 2009.