Which term describes employing workers below their full potential, often in part-time or lower-skilled positions?

• A. Unemployment
• B. Underutilization
• C. Overemployment
• D. Underemployment

Answer: (D)

Underemployment describes workers who are employed but not at full potential, often because they are in part-time roles or jobs that don’t fully utilize their skills or education. This focuses on the mismatch between what a person could contribute and what they are actually doing in the labor market. It includes those who would like more hours or a job that better matches their qualifications. By contrast, unemployment means being without a job. Overemployment would mean working more hours than desired, which is opposite the situation described. Underutilization is a broader, less precise term, but underemployment is the standard label for this specific mismatch between potential and actual work.