The Analysis of Underemployment in Indonesia: Determinants and its Implication

Underemployment is workers who work less than normal working hours and would willing to accept another job. Using the 2011 National Socio-Economic Survey, this study examines, firstly, what factors in terms of demographic and economic factors that influence the underemployment in Indonesia. A multinomial logit model is employed to see the probability of being underemployed. Secondly, this study tries to examine the effect of the underemployed on the welfare of workers as measured by their poverty status. This study finds that underemployed is more likely to be categorized as poor households because of their lower utilization in the labour market.