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The nature, antecedents and consequences of underemployment.

While the topic of unemployment has regained the attention of organizational scholars over the past decade (cf. Leana & Feldman, 1992; Liem & Liem, 1988; Warr, Jackson & Banks, 1988), the issue of underemployment has remained largely ignored. As Zvonkovic (1988) notes, politicians and the popular press have made a low unemployment rate the symbol of economic well-being for American families. Largely ignored have been the economic and emotional problems of those who are underemployed in jobs requiring significantly less education and work experience than they possess, often in positions offering much lower wages, fewer benefits, fewer working hours, and less job security than in their last jobs (Newman, 1988).

Because underemployment has been conceptualized and measured in so many ways (cf. Clogg, 1979; Glyde, 1977; Gordon, 1972; Kaufman, 1982; Khan & Morrow, 1991; Rosen, 1987; Schiller, 1980), precise figures on the extent of underemployment in this country are not readily available. Nonetheless, the figure of 25% of the workforce being underemployed seems to be a reasonable estimate (Newman, 1988). Three groups, in particular, highlight the degree of underemployment in the United States today.

First, the growth of the contingent workforce in the U.S. has been remarkable. Currently, about 25% of the workforce is engaged in part-time or temporary employment; estimates suggest that 33% of the part-time and 66% of the temporary employees involuntarily hold these positions because no alternative employment opportunities are available (Ansberry, 1993; Feldman & Doerpinghaus, 1992; Feldman, Doerpinghaus & Turnley, 1994; Morrow, 1993). Moreover, one-fifth of this year's college graduates were hired for temporary or contractual positions (Feldman & Turnley, 1995).

Second, underemployment has historically been high among laid-off workers re-employed in new jobs (Buss & Redburn, 1983; Gordus, Jarley & Ferman, 1981). Given the large number of layoffs since 1987, underemployment in this sector of the population has increased as well. For instance, in their study of 2,192 laid-off steelworkers, Leana and Feldman (1992) found that only 66% of the re-employed were working full-time, 85% were making 40% or less money than in their former jobs, and 70% reported receiving significantly fewer fringe benefits than in their previous jobs.

Third, underemployment appears to be increasing among recent high school and college graduates as well (Borgen, Amundson & Harder, 1988; Greenberger & Steinberg, 1986). Estimates of underemployment among recent graduates by Khan and Morrow (1991), Mottaz (1986), and Sargent (1986) range from 12% to 36%; estimates of underemployment among recent graduates in the United Kingdom and Australia are comparable (Feather & O'Brien, 1986a, 1986b; Winefield, Winefield, Tiggemann & Goldney, 1991). Since extensive corporate restructuring has simultaneously eliminated thousands of mid-level positions in organizations and increased the number of highly experienced workers competing in the entry-level labor market, it is not surprising to see more and more college graduates forced into underemployment.

This paper has three goals. First, it presents a new conceptualization of underemployment which integrates previous definitions of labor economists, sociologists, and psychologists. This conceptualization defines underemployment in terms of education, work duties, field of employment, wages, and permanence of the job. In contrast to the case of unemployment, we suggest here that underemployment is not only objectively, but also subjectively, determined and that underemployment may be a continuous, as well as a dichotomous, variable.

Second, the article reviews the previous literature on the antecedents of underemployment and presents testable propositions to guide future research. Among the factors to be considered here are economic factors (e.g., recessions, labor markets in industries and firms), job characteristics (e.g., hierarchical level, staff vs. line, functional area), career history variables (e.g., layoff history, time unemployed, career plateaus), job search strategies (e.g., time and intensity of search, retraining, geographical relocation), and demographic variables (e.g., gender, race, age, and education).

Third, the paper reviews the previous research on outcomes of underemployment and presents a series of hypotheses about the impact of underemployment. Proposed outcomes of underemployment include attitudes towards jobs, careers, and overall lives, job behaviors (e.g., productivity, organizational citizenship behaviors, and withdrawal), and quality of marital, family, and social relationships. The article concludes with a discussion of future directions for new theory development, research methodology, and institutional assistance programs for the underemployed.

The Nature of Underemployment

While definitions of underemployment vary, both between and within academic disciplines, all share two key elements. Underemployment is defined somehow as an inferior, lesser, or lower quality type of employment. In addition, underemployment is defined relative to some standard. In some cases, underemployment is defined relative to the employment experiences of others with the same education or work history; in other cases, underemployment is defined relative to the person's own past education or work history. In each definition, however, what the studied population's employment is "under" is specified as well.

Economists have primarily defined underemployment in terms of wages. For example, Zvonkovic (1988) uses as her definition of underemployment "current earnings at least 20% less than earnings in the previous job." This definition mirrors the work of Elder in his research on underemployment during the Depression; in that research, Elder (1974) used a 33% rate of income loss. In much economic research, then, loss of income is the critical element in defining underemployment.

Other economists have defined underemployment in terms of erratic employment or in terms of employment mismatched with education and training. For instance, Tipps and Gordon (1985) include in their underemployed category those individuals who were experiencing intermittent employment after having been continuously and regularly employed during the previous five-year period. Sullivan and Hauser (1979) categorize individuals as underemployed if they were overeducated for their jobs; some economists, for example, utilize General Educational Development (GED) scores in the Dictionary of Occupational Titles to determine these mismatches (Clogg & Shockey, 1984).

By and large, the economic literature also distinguishes between underemployment and absolute level of income (Campbell, 1981; Moen, Kain & Elder, 1983; Zvonkovic, 1988). For economists, the psychological and behavioral consequences of loss of income are conceptually distinct from those which attend individuals living habitually close to the poverty line. It is the disruption of earnings, rather than the level of income, which is the most distinguishing characteristic of underemployment. (However, some economists have also used a category called "low income underemployed" in their research studies [cf. Clogg, Sullivan & Mutchler, 1986]).

Thus, for economists underemployment is usually defined dichotomously (underemployed or not) along the criteria of income loss, intermittent employment, or overeducation. In some cases the referent for underemployment is the previous job held; in other cases, it is an absolute standard (e.g., number of weeks continuously employed); in other cases, the referent for underemployment is others with similar educational or work achievements.

Sociologists have usually used many of the same indicators as economists in identifying underemployment. Rosen (1987), for instance, also defines underemployment in terms of educational level needed to obtain a job, loss of income, and continuity and permanence of employment. Similar approaches have been taken by Bluestone and Harrison in The deindustrialization of America (1982) and The great U-turn: Corporate restructuring and the polarizing of America (Harrison & Bluestone, 1988) and by Newman in Falling from grace (1988) and Declining fortunes: The withering of the American dream (1993).

Among social psychologists and organizational behavior researchers, greater weight has been given to self-report data and individuals' own perceptions of whether or not they are underemployed. For instance, in a study of male college graduates, Borgen, Amundson and Harder (1988) interviewed subjects and asked such questions as "Could you please tell me when it was that you first became aware that you were underemployed?" Using a similar methodology, Burris (1983) asked clerical workers whether or not they felt "overeducated (or overqualified) for their jobs."

In most survey research on underemployment, organizational behavior researchers have used some type of discrepancy measurement to determine underemployment. Quinn and Mandilovitch (1975) used archival data to determine underemployment by comparing an individual's formal education to the number of years of education required by the job, the average number of years of education others in the same line of work possessed, and the average number of years of education others in the individual's work group possessed. Using self-report survey data, Khan and Morrow (1991) measured "relative education" by comparing individuals' self-reports of their own education to the perceived amount of education needed to satsify minimum qualifications for the jobs they held. Khan and Morrow (1991) also used two Likert scales to tap underemployment: "perceived overqualification" and "perceived no growth." Following Khan and Morrow, Feldman and his colleagues used self-report items to measure underemployment among contingent workers (Feldman & Doerpinghaus, 1992; Feldman, Doerpinghaus & Turnley, 1994). In these studies, part-time and temporary workers were asked whether their jobs utilized their previous education and work experience, and whether people with considerably less education and experience could satisfactorily perform their jobs.

Table 1 suggests, then, that there are five dimensions of underemployment. Each of these attributes is considered in more detail below.

Table 1. Dimensions of Underemployment

1. Person possesses more formal education than the job requires

2. Person involuntarily employed in field outside area of formal education

3. Person possesses higher-level work skills and more extensive work experience than the job requires

4. Person involuntarily engaged in part-time, temporary, or intermittent employment

5. Person earning wages 20% or less than in the previous job (For new graduates, wages 20% or less than average of graduating cohort in same major or occupational track)

The first dimension of underemployment is possessing more formal education than the job requires. This dimension is consistent with previous conceptualizations of underemployment by economists, sociologists, psychologists, and organizational behavior researchers. The second dimension captures a somewhat different aspect of the phenomenon. Here we suggest that it is not simply overeducation itself which is indicative of underemployment, but also whether the individual is involuntarily employed outside his/her area of education.

For example, an engineer with a master's degree in engineering, unable to find suitable employment in engineering, may obtain a sales management position which also requires a master's degree. For an MBA in marketing, this position might be considered satisfactory employment; for a fast-track engineer moving into general management, this position might also be considered satisfactory employment. However, for an engineer desiring to continue his career in engineering, the sales management job psychologically represents underemployment nonetheless, despite the high level of formal education it requires.

The third dimension of underemployment is analogous to the first dimension, but focuses instead on whether the person possesses higher-level work skills and more extensive work experience than the job requires. Most previous research on underemployment has focused exclusively on the formal education requirements of a job. However, here we suggest that individuals accrue significant amounts of human capital by virtue of years of service within an organization or occupation, and some jobs utilize that human capital more fully than others. Thus, the chairman of an illustrious research-oriented chemistry department, forced out of office and assigned to teach freshman chemistry, technically still needs a Ph.D. for employment - but is likely to psychologically experience the new job as underemployment nevertheless.

The fourth dimension of underemployment - involuntary part-time, temporary, or intermittent employment - is quite similar to operationalizations previously suggested by researchers in economics. The modification here involves the concept of "voluntariness." The logic underlying the notion that all contingent employment represents underemployment rests on two assumptions: (a) virtually all employees want to work in full-time, permanent jobs, and (b) part-time and temporary jobs inherently require fewer skills. While historically these assumptions may have been true, currently many contingent workers are voluntarily parttime or temporary workers (Tilly, 1991), and more and more of these jobs are in nursing, consulting, and management (Simonetti, Nykodym & Sell, 1988). Thus, we suggest here that underemployment occurs with intermittent employment only when individuals want full-time, permanent jobs and can not find them. It is in these cases that individuals experience the sense of deprivation most associated with underemployment.

The fifth dimension of underemployment presented in Table 1 involves wages. Consistent with previous research on underemployment (cf. Rosen, 1987), it is suggested that underemployment for workers already in the workforce exists when they become re-employed at wages at least 20% less than those in their last job. Because underemployment among recent college graduates is becoming increasingly salient (Feather & O'Brien, 1986a, 1986b; Winefield & Tiggemann, 1989a, 1989b), we propose here that new graduates (e.g. those just entering the workforce right from school) be considered underemployed when their wages are at least 20% less than the average wages received by other new graduates in the same major or occupational track.

There are several aspects of this conceptualization of underemployment which should be noted. In each dimension, underemployment is viewed as some type of discrepancy or deviation. In some dimensions, the standard of comparison is the person's past achievements; in other dimensions, the standard of comparison is the work and educational histories of coworkers; in still others, the standard of comparison is the person's own expectations and desires. In each case, however, underemployment is conceptualized in some way as a discrepancy between "satisfactory employment" (Kaufman, 1982) and current employment.

Consistent with this conceptualization, underemployment is also viewed here as both objectively and subjectively determined. Some dimensions of underemployment (such as wages and amount of formal education relative to job requirements) can be "objectively" determined with considerable accuracy from archival data. On the other hand, whether individuals are involuntarily employed outside their field of formal education or involuntarily working as contingent workers are subjective perceptions of the individuals themselves. While no single research project may measure all five of these dimensions simultaneously within the same sample, it is important to remember that underemployment is determined both by the objective characteristics of the employment situation and the subjective interpretations of those employment situations.

Finally, while it is possible to operationalize each dimension of underemployment presented in Table 1 dichotomously (e.g., voluntarily/involuntarily working part-time, wages 20% less than those on the last job or not), it is also possible to conceptualize underemployment as a continuous variable when these dimensions are considered together. Thus, a college graduate working in his field of study at satisfactory wages but only on a part-time basis may be "less underemployed" than a classmate working outside his field of study, at significantly lower wages, also on a part-time basis. By conceptualizing underemployment as a continuous variable, too, we may have more success in untangling previous research on the predictors and consequences of underemployment and in gaining a more robust understanding of this complex phenomenon.

Antecedents of Underemployment

Compared to the research on outcomes of underemployment, there has been relatively little research on its antecedents. However, the literatures on unemployment, organizational decline, and career development suggest several promising avenues for identifying those factors which might be highly correlated with underemployment. As we suggest in Figure 1 and discuss below, economic factors, job characteristics, career history variables, job search strategies, and demographic variables are hypothesized to be significantly correlated with individuals' susceptibility to underemployment.

Economic Factors

The overall state of the economy has long been associated with levels of underemployment, i.e., the percentage of the workforce who experience underemployment. Elder's work (1974), for example, suggests that deep recessions and depressions are likely to generate underemployment, both because new job creation is low and because jobs at higher wage rates are fewer in number (Zvonkovic, 1988).

As the economy in the past few years suggests, however, underemployment can occur in more prosperous times as well. Underemployment may also arise from uncertainty in the economy about governmental regulation of wages, benefits, and protections for workers. Whether rightfully or not, many businesses have been reluctant to add to their payrolls because of fears of escalating mandated benefits and decreasing flexibility to layoff workers (Leana & Feldman, 1992). This inability to tightly control the size of the workforce and the true costs of labor (benefits as well as salary) has led many organizations to decrease the number of permanent employees hired and increase the number of subcontractors and temporary workers employed.

H1: Levels of underemployment will rise as: (a) recessionary pressures increase; and (b) concerns about governmental regulation of labor costs increase.

Economic conditions at the company-level and industry-level are also likely to be associated with rates of underemployment. As deindustrialization occurs, there are fewer opportunities for workers to advance their careers within their own firms. Increasing numbers of highly-skilled workers are forced to take pay cuts and/or lower-level jobs just to keep their employment. Similarly, when extensive downsizing is occurring within an industry, laid-off workers have more difficulty obtaining higher or even comparably-skilled jobs at other firms in the same industry (Harrison & Bluestone, 1988). Many laid-off workers may have to take pay cuts or demotions simply to obtain employment in other industries because they have less experience or training in those industries.

The same dynamics appear to occur across subunits within a firm as well. Individuals working for quickly declining subunits are more likely to experience underemployment than those in steady-state or growing subunits (Cameron, Whetten & Kim, 1987; Greenhalgh, 1982). This happens because organizations have to adapt to poorer economic conditions by deploying their limited human resources more carefully. Organizations which are retrenching may allocate their best workers to subunits with the greatest potential for success, while eliminating jobs or laying off workers in the weaker units.

H2: Levels of underemployment will be higher among workers: (a) in declining firms than in steady-state or growing firms; (b) in declining industries than in steady-state or growing industries; and (c) in declining subunits than in steady-state or growing subunits.

Job Characteristics

Moreover, the research suggests that susceptibility to underemployment will not be equally dispersed throughout the firm. When finns retrench, their "administrative intensity" (the number of managers relative to the number of workers) declines, too (Cameron, Kim & Whetten, 1987; Greenhalgh, 1982). Consequently, greater numbers of managers are forced into layoffs, early retirement, or lower-paying, lower-skilled jobs. Middle managers, whose jobs are neither front-line supervision nor top-level strategic planning, may become particularly vulnerable to underemployment because the tangible results of their jobs may be less visible, and hence less valued. Along the same lines, compared to those holding line jobs, individuals in staff jobs may be more vulnerable to layoffs and subsequent underemployment because their job functions are viewed as less essential (D'Aveni, 1989).

Writing about the reallocation of human resources in declining firms, D'Aveni (1989) also suggests that declining firms become more highly staffed with individuals with legal, financial, and accounting backgrounds and relatively understaffed with individuals with marketing and research and development backgrounds. This may occur because declining firms feel a greater need to deal with creditors' demands or because they are under greater pressure to cut discretionary expenditures quickly.

H3: Levels of underemployment are likely to be higher: (a) among managers than among non-managers; (b) among staff workers than among line workers; and (c) among marketing and R&D employees than among finance, accounting and law professionals.

Career History

Several facets of an individual's own career history are likely to influence susceptibility to underemployment, too. First and foremost, individuals who have been previously laid off from their jobs are more likely to suffer from underemployment (Kjos, 1988; Tan, Leana & Feldman, 1994). Individuals who have been laid off from their jobs may have some stigma in the marketplace, whether warranted or not, that hurts their chances of obtaining new jobs at comparable or better wages than in their last jobs. Where layoffs have been done on the basis of merit (as opposed to plant location), the individuals who lose their jobs are also more likely to have lower skill levels and, therefore, be less competitive in the external labor market.

H4: Individuals who have been laid off are more likely to experience underemployment than individuals who have been continuously employed.

In addition, the length of time an individual has been unemployed since a layoff or since graduation is likely to be highly correlated with underemployment. Because many individuals who are laid off are unemployed for long periods of time and deplete their financial resources, they may have to accept less-than-satisfactory employment simply to make ends meet (Sandler, 1988; Tan, Leana & Feldman, 1994). Similarly, we suggest here that the longer a recent graduate has remained unemployed after graduation, the more likely he/she is to become underemployed (Winefield & Tiggemann, 1989a, 1989b). A lengthy period of unemployment after graduation may be a signal to employers that the graduate is at the lower end of the skill hierarchy and hence is less desirable - or at the least, is more readily available at low wages. As is the case with laid-off workers, the longer recent graduates are unemployed, the more desperate they become to obtain any job and the more likely they are to accept some type of temporary or contract employment (Feather & O'Brien, 1986b).

H5: The longer an individual is unemployed, the more likely he/she is to become underemployed.

Hypothesis 6 proposes that individuals who have become career plateaued are also more likely to become underemployed. Career plateaued workers are those who are unlikely to be further promoted or given positions of increased responsibility in their firms (Evans & Gilbert, 1984; Near, 1985; Veiga, 1983). While career plateaus are not necessarily associated with declining performance (Stoner, Ference, Warren & Christensen, 1980), organizations facing decline are pressured to remove as much slack as possible (Greenhalgh, 1982). Thus, when organizations retrench, there is more pressure to lay off or terminate workers who are satisfactory but not critical to the firm. Moreover, when these workers enter the external labor market, their undistinguished records often leave them no choice but to accept new positions at lower wages and with fewer responsibilities, particularly when the economy as a whole, or in their industry, is poor.

H6: Individuals who are career plateaued are more likely than their coworkers to become underemployed.

Job Search Strategies

While those who are underemployed are usually pictured as passive victims of forces outside their control, it is also the case that there are specific steps which individuals can take to decrease the likelihood they will become underemployed or remain underemployed (Jahoda, 1982; Liem & Liem, 1988). For example, we would expect students who start job hunting earlier and who invest the most energy in the job hunt (e.g., signing up for interviews, attending job fairs, etc.) to be less likely to become underemployed. Earlier and more energetic job hunting may help students refine their interviewing skills and increase the number of suitable job opportunities for which they will be considered. Similarly, in the case of workers who are laid off, individuals who delay their job search and who are too depressed to organize an aggressive job hunt may also be more likely to become underemployed (Gal & Lazarus, 1975; Roth & Cohen, 1986). In tight job markets with many similarly-experienced workers looking for jobs, those individuals who implement a high-energy job hunt early may have a greater chance of finding jobs with comparable wages and responsibility levels.

H7: Underemployment will be inversely correlated with: (a) an early start to job hunting, and (b) an intensive job search effort.

The research also suggests that some coping strategies may be more effective than others in helping workers find satisfactory employment. In particular, obtaining retraining and relocating geographically appear to be instrumental in avoiding underemployment, particularly in cases where there have been widespread layoffs (Leana & Feldman, 1995). Retraining helps workers refine their skills to find comparable jobs in different industries or occupations, while geographical relocation helps workers increase the number of companies where they can find jobs suitable for their skills. When workers refuse to seek additional training and refuse to move geographically to obtain comparable jobs, they are left with fewer and fewer avenues out of underemployment. Along the same lines, college graduates who overly restrict the geographical area of their job search and who refuse to obtain additional technical skills for entry-level jobs may also be more likely to become underemployed.

H8: The use of geographical relocation and retraining to obtain new jobs will be inversely correlated with underemployment.

Demographic Characteristics

Finally, the research on unemployment, career development, and organizational decline suggests that individuals' demographic characteristics, independent of their work histories, may increase susceptibility to underemployment. The variables most frequently discussed in this regard are gender, race, age, and education.

For a variety of reasons, women have suffered more downward mobility in the U.S. than men (Newman, 1988). When women with school-aged children get divorced, they are often forced to re-enter the workforce quickly. As a result, they often end up employed in jobs which do not require the amount of education they possess because they do not have recent work experience (Weitzman, 1985). Women also seem more willing than men to settle for lower wages in order to balance their family demands and their careers (Rosen, 1987). In addition, women are more vulnerable to being laid off from their jobs than men, and when laid off, have more difficulties finding satisfactory re-employment (Marshall, 1984; Nowak & Snyder, 1983).

The differences between races in terms of unemployment and underemployment have been less thoroughly studied, but the evidence to date suggests that racial minorities are more likely to become underemployed. The national unemployment rate for racial minorities is consistently higher than that of white workers, regardless of industry, job classification, age, or gender (Ullah, 1987). Blacks and Hispanics also sustain longer periods of unemployment following layoffs than do their white counterparts, and fare worse in terms of gaining satisfactory reemployment (Leana & Feldman, 1992; Newman, 1988).

H9: Underemployment will be higher: (a) among women than among men, and (b) among racial minorities than among whites.

The evidence on the effects of age and education on underemployment is more mixed. For example, older blue-collar workers are somewhat less vulnerable to unemployment than their younger colleagues because of seniority protections, but often have more difficulty finding re-employment when they are laid off because of age bias (Dunn, 1979; Kaufman, 1982; Mooney, 1966). More educated workers seem to be less vulnerable to layoffs and underemployment than their less educated coworkers, but the absolute and relative amounts of income they lose in underemployment are greater (Burris, 1983; Leana & Feldman, 1992; Newman, 1988). Thus, we propose here that age will be positively related to underemployment and education negatively related to underemployment, but those effects are likely to be smaller than the effects of gender and race.

H10: Underemployment will be positively correlated with age.

H11: Underemployment will be negatively correlated with education.

Consequences of Underemployment

Not surprisingly, there has been considerable research on the impact of underemployment on job attitudes and overall mental health. To a lesser extent, underemployment has been linked with attitudes towards careers, job behaviors and job performance, and marital, family, and social relationships [ILLUSTRATION FOR FIGURE 1 OMITTED]. In the section below, we review the research to date on the consequences of underemployment and suggest some potential avenues for future research on this issue.

Job Attitudes

Underemployment has been consistently linked with poorer job attitudes. Khan and Morrow (1991), for instance, found underemployment to be negatively correlated with job satisfaction. Borgen, Amundson and Harder (1988) found that underemployment was negatively associated with dissatisfaction with the job, while Burris (1983) reported that underemployment in her sample of clerical workers was negatively associated with job satisfaction, job involvement, relationships with coworkers, future job aspirations, and feelings of control.

The negative association between underemployment and job attitudes can be traced to both the absolute and relative amount of rewards they receive. Underemployed workers may receive fewer extrinsic and intrinsic rewards from their jobs in terms of salary and feelings of accomplishment than "satisfactorily employed" workers do. Moreover, underemployed workers are more likely to experience negative job attitudes because of the greater discrepancy between the rewards they receive and the rewards they expect (Locke & Latham, 1990; Rousseau, 1990). In addition, underemployed workers trying to extricate themselves from their predicament would have less reason to be involved with, or committed to, their jobs (Borgen, Amundson & Harder, 1988).

H12: Underemployment will be negatively correlated with job attitudes (e.g., job satisfaction, work commitment, job involvement, work motivation).

General Mental Health

Underemployment has also been consistently linked to lower levels of psychological well-being and general mental health. Empirical research has found underemployment to be positively correlated with depression and negatively correlated with self-esteem, locus of control, and general affect (Feather & O'Brien, 1986a, 1986b; Winefield & Tiggemann, 1989a, 1989b). At the most extreme, underemployment has also been linked with suicide (Stack, 1982).

Interestingly, there has been some debate as to the relative negative impact of underemployment and unemployment on overall life satisfaction (Liem & Liem, 1988). Several theorists, such as Jahoda (1982), have argued that employment any employment - provides "latent functions" which are beneficial to workers and which lead to more positive mental health. These latent functions include increased social interactions at work, a greater sense of personal identity, and greater structure to the day. This perspective implicitly suggests that all employment is preferable to no employment, and that underemployment is more akin to satisfactory employment than to unemployment in its psychological impact.

However, recent empirical work suggests that young underemployed workers are just as badly off psychologically as the unemployed (O'Brien & Feather, 1990; Winefield, Winefield, Tiggemann & Goldney, 1991). Furthermore, difficulties in finding satisfactory employment and prolonged underemployment may lead to "learned helplessness" (Seligman, 1975), which results in lower self-esteem, increased depression, and decreased feelings of control. Consequently, consistent with the bulk of previous research, Hypothesis 13 also suggests a strong negative association between underemployment and overall mental health.

H13: Underemployment will be negatively associated with psychological well-being (e.g., overall life satisfaction, optimism, self-esteem, locus of control).

Career Attitudes

The previous research on the links between underemployment and attitudes towards careers has been more indirect. Burris (1983), for instance, found that underemployed workers expressed stronger feelings of frustration about the inability to grow and advance on the job. Moreover, Burris notes that college graduates who are underemployed feel more "entitled" to good jobs and experience stronger feelings of antipathy toward work than their high-school-educated coworkers. Borgen, Amundson, and Harder (1988) found that underemployed college graduates were more disillusioned with their situation, more frustrated with lack of opportunities for advancement and the low challenge of their work, and more "worried about being stuck" (p. 155). They also expressed more negative perceptions of their abilities to make good career decisions in the future and about their prospects for "realizing their dreams" (p. 155). The impact of underemployment on attitudes towards careers, then, appears to be twofold.

First, underemployment may be associated with lower investment in one's career and more negative attitudes towards one's career. In many ways, underemployment represents a violation of the psychological contract between workers and organizations (Rousseau, 1990). When laid-off workers are forced into underemployment when they re-enter the workforce, it is unlikely they will have the same levels of career investment or excitement about their careers as they had previously (Leana & Feldman, 1990). For recent graduates, too, underemployment represents a violation of expectations; college graduates expect, perhaps naively, to find challenging work upon completion of their degrees. As a result of their unfilled expectations, college graduates are likely to decrease their contributions to their employers and feel less obligated to perform at high levels (Robinson, Kraatz & Rousseau, 1994). Similarly, for underemployed contingent workers, attitudes towards careers also decline (Feldman & Doerpinghaus, 1992; Feldman, Doerpinghaus & Turnley, 1994). This is especially true when contingent workers do not have their positions converted into permanent, full-time jobs.

Second, underemployment may be associated with more careerist activity. Individuals who do not find satisfactory employment may grow cynical about the relationship between hard work and employment success and turn instead to non-performance-based behaviors (e.g., manipulative interpersonal behavior, image management, etc.) to obtain better jobs. For instance, Feldman and Weitz (1991) found that students with lower GPAs and poorer prospects for employment were more likely to express careerist attitudes towards their work and to engage in more careerist behavior. Rousseau (1990) also found evidence of a link between broken psychological contracts and careerist behavior in her study of recent MBA graduates. Thus, Hypotheses 14 and 15 suggest that underemployment will be negatively correlated with attitudes towards careers and positively correlated with careerist attitudes and behaviors.

H14: Underemployment will be inversely related to attitudes towards careers.

H15: Underemployment will be positively related to careerist attitudes and behaviors.

Job Behaviors and Job Performance

The consequences of underemployment on job behaviors and job performance are less clear. Probably the job behavior which is most closely associated with underemployment is turnover. Burris (1983), for instance, found that underemployed workers were less likely to "give their jobs one year" to improve before leaving; similar findings are reported by Borgen and Amundson (1984). Tan, Leana and Feldman (1994) report that laid-off workers who were underemployed in their new jobs were more likely to continue to job hunt even after becoming reemployed. Intentions to turnover are also higher among underemployed contingent workers (Feldman & Doerpinghaus, 1992; Feldman, Doerpinghaus & Turnley, 1994). Among recently graduated MBA students, Robinson, Kraatz and Rousseau (1994) found employees who felt their organizations were not fulfilling their commitments to them were less likely to give advance notice before leaving and were less likely to stay two years with the organization. When considered with the evidence that underemployment is also strongly associated with job dissatisfaction, it is reasonable to propose that underemployment will be highly correlated with turnover as well (Feldman & Turnley, 1995).

Along the same lines, we would also expect underemployment to be linked with high rates of absenteeism. Underemployed workers who are job dissatisfied are more likely to take "mental health days," i.e., days off not due to physical illness (Breaugh, 1981). Moreover, since underemployed workers are more likely to be out job hunting, their absences from work for this reason should increase as well.

H16: Underemployment will be positively correlated with: (a) turnover, and (b) absenteeism.

The impact of underemployment on productivity itself has not been thoroughly investigated. The common presumption is that performance among the underemployed will be lower because of decreased motivation and job involvement. Qualitative data from Borgen, Amundson and Harder (1988), for instance, suggest that underemployed workers are more fatalistic and see less point in trying to work hard. However, objective empirical data on the performance levels of underemployed workers are not presently available.

What would perhaps be interesting to investigate here are the ways in which different types of underemployment influence workers' productivity. Implicit in the argument that underemployment leads to lower productivity is the notion that workers reduce the inequity of underemployment by decreasing contributions to work. For workers who are underemployed in terms of lower wages, we might indeed expect a lower quantity of output. However, underemployed workers who are well compensated but who are overqualified for their jobs in terms of education and work experience may reduce the quality of work to achieve equity instead. Contingent workers hoping to gain full-time employment may increase performance to increase the likelihood of being hired permanently, while underemployed workers employed outside their field of interest may display poorer performance (both because of less relevant abilities and lower motivation). Thus, while the aggregate performance levels for the underemployed may be lower than those of the satisfactorily employed, there may also be substantial variance in productivity among different categories of the underemployed.

H17: Underemployment will be negatively correlated with job performance.

One other aspect of individual performance which has not yet been investigated in terms of underemployment is organizational citizenship behavior (Organ, 1988; Van Dyne, Graham & Dienesch, 1994). It is reasonable to expect that underemployed workers will have less altruism about contributing to their organizations above and beyond the call of duty, particularly when they are anxious to change jobs, organizations, or career paths.

Burris (1983), for instance, notes that underemployed workers frequently channel their desires for challenge and excitement through activities outside of the workplace. Rousseau and her colleagues (Rousseau, 1990; Robinson, Kraatz & Rousseau, 1994) found that individuals who perceived their psychological contracts were violated were more likely to view their exchanges in narrow, transactional terms rather than in long-range, non-economic terms. Of the three factors of organizational citizenship defined by Van Dyne et al. (1994), underemployed workers would certainly be less likely to engage in "loyalty behaviors" (e.g., declining jobs at competing organizations for more money) and "participation behaviors" (e.g. volunteering for committees); even on the "obedience" dimension, we would expect underemployed workers to be less likely to engage in such behaviors as "following work rules with extreme care" and "rarely wasting time at work." Thus, while underemployed workers may not systematically have lower productivity levels in terms of quantity and quality of work, Hypothesis 18 proposes they will systematically engage in fewer organizational citizenship behaviors.

H18: Underemployment will be negatively related to organizational citizenship behaviors.

Marital, Family and Social Relationships

There is mounting evidence that underemployment is associated with decreased quality of marital relationships (Newman, 1988). In her study of over 100 couples, Zvonkovic (1988) found that underemployed husbands and wives were significantly more depressed and significantly less satisfied with their marriages than a control group. Economic losses may require families to cut back expenses dramatically, but spouses often cherish their homes and middle-class status symbols and resist lowering their standard of living (Campbell, 1981; Moen, Kain & Elder, 1983). Spouses often have to reenter the workforce or increase their hours of employment outside of the household to help make ends meet. Consequently, spouses of the underemployed may end up working harder but enjoying a poorer quality of life (Rosen, 1987). Moreover, the additional financial contribution of the spouse increases his or her power in the marriage relationship and may generate heated arguments over the new roles and responsibilities of each partner in the marriage (Newman, 1993).

Underemployment can have immediate negative consequences for the children in the family as well. Children (particularly adolescents) feel uncomfortable about the increasingly visible material differences between themselves and their peers, a problem exacerbated by their embarrassment over their parents' new low-status jobs (Leventman, 1981; McElvaine, 1983; Newman, 1988). The authority of the underemployed parent within the family is also undermined (Liem & Liem, 1988). If underemployment forces the family to relocate, children often resent their parents for tearing them away from their friends and neighbors (Dunn, 1979; Dyer, 1973; Newman, 1988, 1993).

Newman (1988) writes that underemployment also has longer-term implications for the psychological development of children of the underemployed. Adolescents often have to go to work to help support the family and have less time to spend in valued interactions with peers. In addition, underemployment can mean teenagers have to lower their aspirations for the type of college they can attend. Underemployment may also prematurely force teenage children into adult roles, making them feel responsible for providing emotional support for their parents instead of receiving it. Moreover, children of the underemployed frequently suffer from low self-esteem and anxiety about their own abilities to become financially secure as adults (Demo & Savin-Williams, 1983). At its worst, underemployment can put the family at risk for greater child abuse as well (Justice & Justice, 1976; Newman, 1988).

The effects of underemployment radiate out and may negatively influence social relations outside the family. One of the most frequently noted responses to underemployment caused by layoffs is social isolation. Many laid-off workers feel they have drained their friends' patience and support and begin to turn inward instead (Leana & Feldman, 1992). Workers reemployed at lower wages frequently cannot afford the same types of social activities with their old friends (e.g., golf, concerts) and increasingly find excuses to decline invitations to join in these events; they may even avoid accepting dinner invitations because they cannot afford to reciprocate or are embarrassed by their new circumstances (Newman, 1988, 1993). For young adults who fail to find satisfactory employment upon graduation, underemployment often means moving back in with parents to save money. Such an arrangement simultaneously decreases their opportunities to entertain friends at home and increases parents' monitoring of non-essential expenses for leisure pursuits. For all these reasons, then, underemployment is hypothesized here to decrease the quality of relationships with spouses, children, and friends (Leana & Feldman, 1995).

H19: Underemployment will be inversely related to the quality of interpersonal relationships with: (a) spouses, (b) children, and (c) friends.

Directions for Future Research

Besides empirical testing of the hypotheses already presented in this paper, there are several broad streams of inquiry that have yet to be explored in the study of underemployment. Here we briefly touch upon theoretical issues, methodological concerns, and institutional policies which might inform future research in this area.

Theoretical Issues

Dimensions of underemployment. As noted at the beginning of this review, there are several conceptually distinct dimensions of underemployment. However, most previous research studies have used only univariate measures of underemployment - and those univariate measures have varied from study to study. The extent to which these five dimensions of underemployment are inter-correlated and the extent to which they can be scaled together needs to be explored. As research on underemployment advances, more research on the "degree of underemployment" and the interrelationships among components of underemployment is clearly warranted.

In addition, by fully understanding the different ways in which individuals can be underemployed, we may get a more robust picture of which antecedent conditions best predict underemployment and when underemployment best predicts outcome variables. For example, economic conditions may predispose workers becoming underemployed in terms of wages, while job characteristics and career history variables may predispose workers becoming underemployed in terms of overqualification. Similarly, underemployment in terms of wages may have the most negative consequences for job behaviors and family relationships, while underemployment in terms of overqualification may have the most negative consequences for job and career attitudes. Perhaps the magnitude and consistency of results in the underemployment literature have been modest because different researchers are studying different sets of antecedents and outcomes with different dimensions of the concept itself.

The meaning of underemployment. The work of Burris (1983) and Borgen, Amundson and Harder (1988) suggests that the attributions individuals make about the reasons for their underemployment influence how they react and how they cope with their predicaments. They found that more highly educated workers made the attribution that structural labor market conditions were responsible for their underemployment, and hence were more hopeful about their abilities to locate better jobs in the not too distant future. In contrast, poorer educated workers made internal attributions about the reasons for their underemployment and expressed greater despair about exiting the culture of poverty.

Kelly (1973) writes that individuals try to make sense about uncertain or stressful events in their lives by assessing those events along three dimensions: (a) the intensity of the threatening event; (b) the causality of the event; and (c) the reversibility of their circumstances. To the extent that individuals view their predicament as highly aversive, caused by their own actions (or inactions), and irreversible, the less likely they will be energized to try to effect change in their lives.

In the context of underemployment, attribution theory may be useful in helping us understand the different types of attributions underemployed workers make about their circumstances, and subsequently, why they react and cope as they do. For example, individuals who attribute their underemployment to economic conditions or their demographic characteristics may perceive their underemployment as being externally caused and irreversible; as a result, they may blame themselves less for their predicament but also engage in fewer coping behaviors to find satisfactory employment. In contrast, individuals who attribute their underemployment to the characteristics of their jobs or their own job search strategies may take more personal responsibility for their circumstances and invest more energy in finding a reasonable exit. Thus, a second major avenue for future research is exploring how people socially construct their reality to explain why underemployment occurred and the ways in which those attributions influence how people react to underemployment.

Expanding theoretical perspectives. Much of the research on underemployment to date has been atheoretical. Many researchers have used data sets to document empirical relationships in the underemployment area, with possible theoretical rationales presented post hoc, rather than collecting data specifically to test theoretical propositions. As a result, we know much more about the existence of empirical relationships regarding underemployment than we do about the theoretical reasons for them.

Besides attribution theory, there are other theoretical perspectives that might inform our understanding of underemployment. For example, equity theory may be useful in understanding how underemployment influences job performance and job behaviors. As we saw above, the inconclusive results on the impact of underemployment on performance may be due to the different ways various groups of underemployed workers resolve perceived inequities. Role theory may be useful in discovering how underemployment influences and changes family relationships over time. The stress literature may be useful in understanding when underemployment energizes, rather than paralyzes, workers to seek more satisfactory employment and to engage in more functional coping behaviors. Other paradigms, such as human capital theory, organization theory, or career theory, may be useful here in exploring workers' vulnerability to underemployment. For research on underemployment to advance, then, much more attention needs to be paid to the theoretical reasons why the dynamics of underemployment unfold as they do.

Methodological Issues

Operationalizations. With very few exceptions, research on underemployment has utilized either objective indicators (e.g., wages) or subjective indicators (e.g., self-report surveys) of the construct. Moreover, there are not widely accepted measures of underemployment using either type of indicator. As a result, inconsistent findings in the underemployment literature may be due as much to measurement differences as to theoretical explanations.

For research on underemployment to move forward, it is critical that more standardized measures of underemployment be developed. In addition, while no one research project may include all five dimensions suggested earlier in the review, it is important that measures of underemployment include both some objective component and some subjective component. The psychological dynamics of underemployment appear to be driven by a perceived discrepancy between the current employment situation and the preferred one. To adequately tap those dynamics, then, it is critical to obtain both some objective measure of the degree of inferiority of the current position and some perceptual measure of the experienced loss or deprivation.

Sampling. Compared to many other topics in organizational behavior and human resource management, underemployment has received considerably less empirical investigation. As noted earlier, several frequently-cited studies on underemployment have used samples smaller than 100 and samples composed only of one occupational group (e.g., sales clerks). To have more confidence in the findings on underemployment, it is important that researchers utilize both larger and more diverse samples. For instance, the antecedents and consequences of underemployment may be significantly different for laid-off workers, new college graduates, and middle-aged women re-entering the workforce. Similarly, the antecedents and consequences of underemployment may be very different for middle managers, blue-collar workers, and service workers. Only by broadening and diversifying the samples studied can we understand the commonalities and differences across experiences in underemployment.

Multivariate research. Not surprisingly, small sample sizes have also put severe constraints on the number of variables studied within any one empirical study. Thus, we have studies linking underemployment with job satisfaction or linking education with underemployment, but very few studies examining either multiple predictors or outcomes of underemployment in the same study.

Because several of the antecedents of underemployment (e.g., career history and demographic characteristics) and several of the consequences of underemployment (e.g., job attitudes and career attitudes) may themselves be highly inter-correlated, it is important to move to larger data sets with multivariate designs. Multivariate research would allow such multicollinearity to be more easily detected and controlled for. More importantly, multivariate research would allow researchers to discover the relative impact of various antecedent factors in predicting underemployment and the relative impact of underemployment in predicting various outcome variables.

Time frame. As the work of Newman (1988, 1993) so dramatically points out, the consequences of underemployment are not simply short-term. The negative spin-off effects may extend much longer than the period of underemployment itself, and the longer those effects last, the more injurious its effects on family members and friends of the underemployed are likely to be. Consequently, future research on underemployment needs to investigate not only its short-term effects on employee wages and mood states, but also its longer-term effects on earning power and overall mental health. Longitudinal research would also increase investigators' opportunities to examine the impact of underemployment on spouses, children, and friends of the underemployed.

Most importantly, longitudinal research would allow more careful scrutiny of so-called "stage models" of reactions of unemployment and underemployment. Kaufman (1982) and Newman (1988), for instance, both suggest that workers who lose their jobs go through stages of reactions as they try to gain re-employment: a period of shock, followed by a period of high-energy job-seeking, followed by a period of self-doubt and anger, and without satisfactory re-employment, a lapse into despair. Longitudinal studies of underemployment would facilitate researchers' efforts to understand how workers' adjustment to underemployment improves or deteriorates over time and how their coping strategies change as a result of those varying mood states.

Institutional Policy

To date, there has been very little institutional attention paid to underemployment as a separate and distinct employment issue. For those employees who are underemployed as a result of layoffs, there has been some investigation of such interventions as retraining programs, severance pay, relocation allowances, and extended benefits (Leana & Ivancevich, 1987). At the national policy level, there has also been some discussion of strategies needed to increase the number of highly-skilled jobs in the economy as a whole (Kuttner, 1994). This debate has been framed in terms of decreasing the number of employees stuck in contingent employment and/or in low-wage service industry jobs (e.g., fast-food workers, janitors, security guards, and retail sales clerks) through such means as altering international trade barriers, increased use of technology, and labor law reforms. However, underemployment is typically viewed as a second-order labor problem - stemming directly from unemployment levels or wage policies - and thus solved only indirectly through interventions in other areas (Kuttner, 1994).

While underemployment may be intricately linked to other labor issues for workers already in the labor force, the one population for whom institutional assistance may be more directly targeted is new college graduates. The high percentage of new graduates who are entering the job market into low-wage, temporary, unskilled jobs is disturbing. The U.S. Labor Department's Bureau of Labor Statistics reports that 20% of all college graduates work in fields not requiring a degree, and this total is projected to exceed 30% by the year 2005 (Henry, 1994). At the minimum, this suggests that students do not receive (or do not utilize) adequate career planning services early enough in their college years to successfully compete for highly-skilled jobs - and that colleges need to do a much more effective job in career counselling and placement.

It may also suggest that there are more students who are attending four-year liberal arts colleges than can benefit from them. Many of the marginal students attending such institutions might spend less money on their education (and gain more money in terms of future economic earnings) by learning skilled trades in two-year technical schools. As it stands now, federal and state governments spend over $150 billion per year on funding public institutions and scholarships for students yet many of these students might obtain more lucrative jobs (and more quickly) from vocational types of training (Henry, 1994).

By all accounts, underemployment in the United States is likely to increase substantially in the decade ahead. Moreover, the bulk of the research to date suggests that underemployment has serious negative implications not only for employees' own careers and psychological well-being, but also for the quality of life their spouses and children can enjoy as well. In order to better understand this important employment issue, we need to more fully explore the nature of underemployment, its antecedents, and its consequences. This article suggests some fruitful avenues to further that research.


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Author:Feldman, Daniel C.
Publication:Journal of Management
Date:Sep 22, 1996
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