Underemployment among mature age workers in Australia

Underemployment is a serious and pervasive problem both in terms of its impact on those individuals affected, and for the economy as a whole. International research has found that those who experience periods of underemployment are more likely to have lower job satisfaction, higher job turnover, poorer mental and physical health and persistently lower earnings. Labour markets with high rates of underemployment are at risk of underutilisation of important skills. This paper explores the patterns of underemployment for mature aged workers in Australia, and seeks in particular to determine the principal factors that contribute to a heightened risk of underemployment. Importantly, our results point to a significant path dependency whereby previous periods of underemployment increase the propensity towards underemployment in the current period.