Underemployment

Tax Glossary Definition

Underemployment

Underemployment – In economics, underemployment occurs when a worker is employed in a job that does not fully utilize their skills, education, or experience. This can happen when a person is overqualified for their role or has to accept low-paying or low-skill work that does not match their capabilities.

Example: A software engineer with a master’s degree in computer science takes a job as a data entry clerk because they cannot find a suitable engineering position. Despite their qualifications, their skills are underutilized, making them underemployed.

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