Effects of Underemployment to the Economy

Learning Team Deliverable Week 6
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Introduction
Underemployment is conceived as the supply of excess labor in association with employed people trying to work more hours at an established wage rate. It has been revealed that this function has greater adverse effects to the economy of a nation (Van Ham, Mulder, & Hooimeijer, 2001). This paper therefore seeks to determine the effects of underemployment to the economy of a nation.
Effects of Underemployment to the Economy
Looking at it from a different angle, employment remains the prime source of income in many nations thus serving as a source for the growth of an economy. Underemployment which is a negative indicator can determine critical information on the state of the economy, in particular some sectors of the economy. For instance, when a nation experiences high rates of unemployment, it is indicative that the economy of such a nation is underperforming with a fall in the gross domestic product, weak labor demands, a mismatch between the demands of workers and unproductive labor policies (Van Ham, et.al). When underemployment on the other hand is low in a nation, it may translate to an increase in the supply of jobs which demulsifies a growing economy. Underemployment also has some adverse effects that are associated with negative effects on workers job satisfaction. These elements are detrimental to the economy of a state.
Conclusion
Due to the recession experienced by many co...