Underemployment in an Ageing Population : Evidence from the Canadian Labour Market

Population ageing has brought about debates over potential labour shortages in many countries, particularly Canada. With women's participation stagnating and immigration raising heated debates, harnessing the labour supply from the underemployed could be an alternative for compensating for an eventual labour shortage. However, underemployment and the underemployed have received relatively low attention from governments and researchers worldwide.In this study, we use the Canadian labour force surveys with data covering the period between 1981 and 2017 to analyze the prevalence of underemployment and the additional labour supply that persons working under their full employment potential represent. We also explore the personal characteristics associated with underemployment to guide public policies that aim at greater wellbeing through full employment.Results show that between 1981 and 2017, there are in average 3.4 million under- employed workers per year, representing 20.07% of the labour force, who could have provided an additional labour equivalent to 1.5 million full-year workers, working 40 hours per week for 50 weeks per year. Being single or having a low education level are the main traits of underemployed men, while recent immigrants and less educated best describe underemployed women