Underemployment, Recessions, and Poverty

Underemployment, Recessions, and Poverty

Underemployment, Recessions, and Poverty
October 14, 2021
Having a job greatly reduces the likelihood of being in poverty: 5.0% of workers in the United
States aged 18 to 64 were poor in 2020 compared with 28.8% of nonworkers. But having a job
Joseph Dalaker
does not completely eliminate the likelihood of being in poverty. In particular, workers who want
Analyst in Social Policy
a full-time job but can only find part-time work (called underemployed in this report) have a

higher poverty rate than other part-time workers: 18.1% of underemployed workers aged 18 to 64
were in poverty compared with 4.4% of other part-time workers.

The poverty rate—the percentage of the population that lives in poverty—fluctuates over the business cycle: it rises during
recessions when work becomes scarce and falls during expansions when work becomes more plentiful. The percentage of the
population that is underemployed follows the same pattern as both the poverty rate and the percentage unemployed, which
suggests a link among these trends.
Thus, while nonworkers constitute a large component of the U.S. poverty population, the absence of work does not provide
the complete picture. This report focuses on a smaller part of the population living in poverty—those who are
underemployed. Policymakers who want to address poverty may be interested in this underemployed population for the
following reasons:
 these underemployed are employed, demonstrating that employment status is not the sole determinant of
poverty status,
 they have higher poverty rates than other part-time workers,
 there is a possible link between underemployment, unemployment, and poverty over the course of the
business cycle, and
 a person’s work status affects not only the person’s own poverty status but also that of any other family
members present by affecting the total amount of income brought into the family.
When a person is available and willing to work more hours but cannot do so, both they and their family members do not
receive as much income as they would had a full-time job been obtained. This influences where they stand relative to their
poverty threshold—a dollar amount that represents a modest level of need.
By definition, the underemployed are part-time workers, meaning they work less than 35 hours per week. Assuming the part-
time job was the only source of income, and the underemployed individual worked for 52 weeks at 22 hours per week in
2020 (the average weekly hours for the underemployed in that year), a single person under age 65 would have needed to earn
at least $11.77 per hour to stay above poverty. For an adult couple under 65 (with one earner), this figure was $15.15; for a
single parent with one child, $15.59; for a single parent with two children, $18.23; and for two adults (with one earner) and
two children, $22.94. Part-time workers in these family arrangements earning less than these hourly wages would have
needed income earned by other family members or received from other sources to be classified as living above poverty.
Over the past 45 years, between 6% and 15% of the population below poverty either was underemployed themselves or lived
with an underemployed family member. Because poverty is measured at the family level (for those who live in families),
underemployment is associated with a vulnerability to poverty not only for the workers but also for their families.
Underemployment’s relevance to poverty may be interpreted in several ways. The underemployed population, and their
family members, have lower poverty rates than those with no job at all—and nonworkers constitute the greatest share of the
poverty population old enough to work (13.0 million persons in poverty aged 18 to 64 in 2020 were nonworkers, compared
with 1.2 million underemployed workers). Those who are underemployed and still below poverty are less likely to be in deep
poverty (i.e., to have incomes below 50% of their poverty threshold) compared with those without jobs. However, if the
expectation is that having a job, even part-time, is enough to protect people and their families from poverty, historically that
expectation has not been met. Because the similar up-and-down patterns of unemployment rates, underemployment rates, and
poverty rates over the course of business cycles suggest a connection between these trends, policymakers who want to
alleviate poverty may be interested in the connection between the availability of jobs and the types of jobs available over the
course of the business cycle.
Congressional Research Service

link to page 5 link to page 6 link to page 8 link to page 8 link to page 10 link to page 10 link to page 12 link to page 12 link to page 13 link to page 14 link to page 17 link to page 19 link to page 9 link to page 9 link to page 14 link to page 14 link to page 15 link to page 17 link to page 17 link to page 18 link to page 21 link to page 21 link to page 7 link to page 11 link to page 11 link to page 20 link to page 20 link to page 20 Underemployment, Recessions, and Poverty

Contents
Introduction ..................................................................................................................................... 1
Scope of the Underemployed Population ........................................................................................ 2
What Do Underemployment, Unemployment, and Poverty Trends Look Like Over Past
Business Cycles? .......................................................................................................................... 4
What Hourly Wage Rate is Needed for a Part-Time Job to Keep Someone Out of
Poverty? ........................................................................................................................................ 6
Poverty Among the Underemployed, Other Workers, Nonworkers, and Their Family
Members ....................................................................................................................................... 8
Depth of Poverty Among Workers by Type of Worker ............................................................. 9
Poverty Status by Type of Worker, Including All Other Family Members Present ................ 10
Poverty Status by Number and Type of Workers Present........................................................ 13
Conclusion ..................................................................................................................................... 15

Figures
Figure 1. Percentage of the Civilian Noninstitutional Population Age 16 and Older by
Work Status and Poverty Status Since 1967 ................................................................................. 5
Figure 2. Percentage of Workers and Nonworkers Aged 18 to 64 by Ratio of Income to
Poverty: 2020 ............................................................................................................................. 10
Figure 3. Poverty Rates of Persons by Type of Worker(s) Present in the Family: 2020 ................ 11
Figure 4. Percentages of the Population Below Poverty, Near Poverty, and At or Above
125% of Poverty, that Were Underemployed or Lived With an Underemployed Worker .......... 13
Figure 5. Poverty Rates by Number and Type of Workers Present in the Family: 2020 ............... 14

Figure A-1. Percentage of the Civilian Noninstitutional Population Age 16 and Older by
Work Status ................................................................................................................................ 17

Tables
Table 1. Persons Aged 18 to 64 by Work Status in 2020 ................................................................. 3
Table 2. Minimum Hourly Wage Needed to Avoid Official Poverty Status, by Selected
Poverty Thresholds and Weekly Part-Time Hours ....................................................................... 7

Table A-1. Percentage of the Civilian Noninstitutional Population Age 16 and Older by
Work Status ................................................................................................................................ 16

Appendixes
Appendix. Monthly Estimates Since 2019 .................................................................................... 16

Congressional Research Service

link to page 22 Underemployment, Recessions, and Poverty

Contacts
Author Information ........................................................................................................................ 18

Congressional Research Service

Underemployment, Recessions, and Poverty

Introduction
Poverty—economic hardship characterized by low income—increases and decreases over the
course of the business cycle.1 The business cycle is the period from the beginning of one
recession (the business cycle peak), through the recession and following expansion, to the
beginning of the next recession.2 The poverty rate—the percentage of the population that lives in
poverty—rises during recessions, when work becomes scarce, and falls during expansions, when
work becomes more plentiful.
Having a job greatly reduces the likelihood of being in poverty: 5.0% of persons aged 18 to 64
who worked at any time during the year were poor in 2020 compared with 28.8% of nonworkers
in the same age range. But having a job does not completely eliminate the likelihood of being in
poverty. In particular, workers who want a full-time job but can only find part-time work3 (called
underemployed in this report) have a higher poverty rate than other part-time workers: 18.1% of
underemployed workers aged 18 to 64 were in poverty compared with 4.4% of other part-time
workers in the same age range.4
Thus, while nonworkers constitute a large component of the poverty population in the United
States, the absence of work is not the full picture. This report focuses on a smaller part of the
population living in poverty—those who are underemployed. Policymakers who want to address
poverty may be interested in the underemployed population for the following reasons:
 the underemployed are employed, demonstrating that employment status is not
the sole determinant of poverty status,
 the underemployed have higher poverty rates than other part-time workers,

1 The poverty definition used in this report is the official poverty measure, computed by the Census Bureau. For details
about how it is defined and how it differs from other measures, see CRS Report R44780, An Introduction to Poverty
Measurement, by Joseph Dalaker. The poverty and labor force data used in this report are estimates based on the
Current Population Survey (CPS), collected by the Census Bureau and analyzed by the Census Bureau and the Bureau
of Labor Statistics. Like all survey-based estimates, CPS estimates have some error due to sampling, and some
nonsampling error (such as errors from respondents failing to report or misreporting information, or errors that take
place during data processing). The Census Bureau attempts to minimize nonsampling error by testing the
questionnaires for clarity, training the interviewers, and using data quality checks during survey processing. The
poverty estimates for both 2019 and 2020, which were based on interviews conducted between February and April of
the following year, were affected by changes in survey collection because of the COVID-19 pandemic. Any interviews
that would have been conducted in person needed to be conducted by telephone. As a result, response rates fell,
particularly among the lower-income population, causing estimates of poverty to appear lower than they would have
otherwise. For a discussion, see Jonathan Rothbaum and Adam Bee, Coronavirus Infects Surveys, Too: Nonresponse
Bias During the Pandemic in the CPS ASEC, U.S. Census Bureau, September 15, 2020, https://www.census.gov/
content/dam/Census/library/working-papers/2020/demo/sehsd-wp2020-10.pdf. A succinct and less technical
explanation by Jonathan Rothbaum is available on the Census Bureau’s “Research Matters” blog at
https://www.census.gov/newsroom/blogs/research-matters/2020/09/pandemic-affect-survey-response.html.
2 Alternatively, it can be measured from the beginning of an expansion (or trough), through the expansion and
following recession, to the subsequent trough. For a basic explanation of the business cycle, see CRS In Focus
IF10411, Introduction to U.S. Economy: The Business Cycle and Growth, by Lida R. Weinstock.
3 Full-time work is defined as 35 or more hours per week, whether from a single job or multiple jobs; part-time work is
defined as at least 1 hour but fewer than 35 hours per week.
4 The term underemployed may also refer to persons whose skills or credentials qualify them to work at a different
higher-paying or higher-skilled job than the job(s) they currently hold. This report does not examine that situation.
What this report calls underemployment is referred to in the economics literature as working part-time for economic
reasons or involuntary part-time work, although some non-economic reasons for part-time work, such as illness or a
lack of available full-time child care, may not be considered voluntary in a practical sense.
Congressional Research Service

1

link to page 7 Underemployment, Recessions, and Poverty

 underemployment rises and falls over the course of the business cycle in the
same pattern as unemployment and poverty, suggesting there may be a link
between these phenomena, and
 a person’s work status affects not only the person’s own poverty status but also
that of any other family members present, by affecting the total amount of
income brought into the family.
When a person is available and willing to work more hours but cannot do so, both they and their
family members do not receive as much income as they would had a full-time job been obtained.
This in turn influences where they stand relative to their poverty threshold—a dollar amount that
represents a modest level of need.
This report will first briefly describe the scope of the underemployed population, and then it will
illustrate how the percentages of underemployed persons, unemployed persons, and persons
below poverty have risen and fallen over the course of previous business cycles. Next, the report
will describe the wage rates by family size for which part-time jobs (such as those held by
underemployed workers) are sufficient for staying out of poverty, and when they fall short. The
last portion of the report will examine the connection between underemployment and poverty
using three types of comparisons:
 examining workers and nonworkers aged 18 to 64 by depth of poverty—how far
above or below the poverty threshold one’s income is—focusing on the poverty
status of the individual workers or nonworkers themselves;
 examining poverty status by types of workers in a given family, to capture the
potential for family members’ work statuses to affect the poverty status of all
family members; and
 comparing poverty rates by both the number and type of workers present in the
family.5
Scope of the Underemployed Population
In 2020, approximately 6.6 million workers ages 18 to 64 were underemployed, and of those, 1.2
million (18.1%) lived in poverty (see Table 1).6 In contrast, approximately 19.0 million people
were working part-time for non-economic reasons, meaning for reasons other than an inability to
find full-time work, and roughly 0.8 million (4.4%) of them were living in poverty.7 Among the
roughly 126.6 million full-time workers, just under 4.2 million (3.3%) were living in poverty.

5 This analysis treats unrelated individuals as one-person families.
6 The COVID-19 pandemic affected both the respondents’ economic behavior and the methods used to collect
information on that behavior by temporarily stopping all in-person interviewing and relying on telephone interviews
only. This change in survey methods lowered the response rate to the survey, and in turn poverty rates were measured
to be lower than they would have been using the previous year’s methods. For a discussion, see Jonathan Rothbaum
and Adam Bee, Coronavirus Infects Surveys, Too: Nonresponse Bias During the Pandemic in the CPS ASEC, U.S.
Census Bureau, September 15, 2020, https://www.census.gov/content/dam/Census/library/working-papers/2020/demo/
sehsd-wp2020-10.pdf. A succinct and less technical explanation by Jonathan Rothbaum is available on the Census
Bureau’s “Research Matters” blog at https://www.census.gov/newsroom/blogs/research-matters/2020/09/pandemic-
affect-survey-response.html.
7 Examples of non-economic reasons for working part-time include health reasons, going to school, and taking care of
family members, as well as a preference to work part-time instead of full-time.
Congressional Research Service

2

Underemployment, Recessions, and Poverty

Thus, among workers, the underemployed constituted the smallest group overall but they had the
highest poverty rate.8
More underemployed workers lived with family members (just over 5.1 million) than as
unrelated individuals—persons who lived alone or with nonfamily members only (approximately
1.5 million). However, poverty was more prevalent among underemployed unrelated individuals
(30.2%, or roughly 0.5 million persons) than among underemployed workers living with family
(14.5%, or approximately 0.7 million), because families (unlike unrelated individuals) can pool
income from multiple earners.
Table 1. Persons Aged 18 to 64 by Work Status in 2020
(Numbers in thousands)
Below Poverty

All Income
Characteristic
Number
Percentage
Levels, Number
Underemployed workers
1,203
18.1%
6,644
In familiesa
740
14.5%
5,110
Unrelated individuals
463
30.2%
1,534
Working part-time for non-economic reasons
834
4.4%
18,968
Ful -time workers
4,198
3.3%
126,634
Nonworkers
13,047
28.8%
45,336
Total, aged 18 to 64
20,640
10.5%
197,582
Source: Congressional Research Service tabulation of data from the U.S. Census Bureau, Current Population
Survey (CPS), 2021 Annual Social and Economic Supplement (ASEC).
Notes: Underemployed refers to working part-time for economic reasons: persons who want to and are available
to work ful -time but cannot find ful -time work, or are working part-time due to slack work (a reduction in
hours in response to unfavorable business conditions) or seasonal work. All other part-time workers are
categorized as part-time for non-economic reasons. Ful -time work is defined as 35 or more hours per week and
may reflect hours from a single job or multiple jobs; part-time work consists of 1 to 34 hours per week.
Nonworkers are those who did not work at least one week in 2020. Details may not sum to totals because of
rounding.
a. Includes persons in unrelated subfamilies—persons related to each other but not to the householder (the
person in whose name the home is owned or rented).

8 While the COVID-19 pandemic did cause both unemployment and underemployment to spike in 2020, the
comparative population sizes and poverty rates of full-time workers, the underemployed, and persons working part-
time for non-economic reasons ranked relative to each other the same as they did in 2019. In 2019, 5.2 million workers
aged 18 to 64 were underemployed, and of those 1.0 million (19.6%) lived in poverty. That same year, 20.5 million
worked part-time for non-economic reasons, and 2.3 million (11.1%) lived in poverty, while 128.9 million persons 18
to 64 worked full-time, of which 4.0 million (3.1%) lived in poverty. Thus, while the overall levels shifted between
2019 and 2020 for all three types of workers, their comparative rankings did not: the underemployed remained the
smallest group overall with the highest poverty rate; full-time workers remained the largest group with the lowest
poverty rate; and those working part-time for non-economic reasons were second-highest both in population size and
poverty rate.
Congressional Research Service

3

link to page 9 link to page 7 link to page 9 link to page 20 Underemployment, Recessions, and Poverty

What Do Underemployment, Unemployment, and
Poverty Trends Look Like Over Past Business
Cycles?
Poverty rates, the percentage of the population age 16 and over who were unemployed, and the
percentage underemployed responded faster and more markedly to changing economic conditions
over the past 50 years than did the percentage working part-time for non-economic reasons.
Figure 1 illustrates the percentage of the civilian noninstitutional population age 16 and older that
was below poverty from 1967 to 2020, and the percentages of the same population that were
unemployed and underemployed from January 1967 to August 2021, with recessions indicated as
shaded bars.9 These monthly data include persons aged 16-18 and persons 65 and over, whose
poverty status and work status differ from the 18-64 population shown in Table 1.10 Poverty rates
are available on an annual basis only, while the beginning and ending dates of recessions, and the
percentages of unemployed and part-time workers, are available on a monthly basis. Monthly
data, when available, have been shown to better pinpoint when the trends changed direction,
relative to the starting and ending dates of recessions.11

9 The percentage of the population that is unemployed is not the unemployment rate, which describes the percentage of
the labor force that is unemployed. The monthly trends in Figure 1 are based on published data from the Bureau of
Labor Statistics (series LNU00000000, LNS13000000, LNS12032197, and LNS12032200).
10 For further discussion on how the 18-to-64 age group differs from younger and older populations by poverty and
work status, see CRS Report R46294, Demographic and Social Characteristics of Persons in Poverty: 2018, by Joseph
Dalaker.
11 For a clearer view of the monthly percentages that were unemployed, underemployed, and working part-time for
non-economic reasons immediately before, during, and after the 2020 recession, see the Appendix.
Congressional Research Service

4

link to page 20
Underemployment, Recessions, and Poverty

Figure 1. Percentage of the Civilian Noninstitutional Population Age 16 and Older by
Work Status and Poverty Status Since 1967
Poverty estimates are available only on an annual basis, from 1967 to 2020. Labor force estimates are
seasonally adjusted. Part-time work categories shown include only non-agricultural industries.

Source: Congressional Research Service, using Current Population Survey (CPS) data from the U.S. Census
Bureau, 1968-2021 Annual Social and Economic Supplements (ASEC), and the Bureau of Labor Statistics (Basic
Monthly Survey, 1967-2021, series LNU00000000, LNS13000000, LNS12032197, and LNS12032200). Recession
dates from the National Bureau of Economic Research (NBER), at https://www.nber.org/cycles.html.
Notes: Underemployed refers to persons working part-time for economic reasons (i.e., persons who want and
are able to work ful -time but cannot find ful -time work), or are working part-time temporarily because of slack
work (a reduction in hours in response to unfavorable business conditions) or seasonal work. Monthly data are
based on responses to work status in the week prior to the CPS interview; poverty rates are based on income in
the ful calendar year. For a closer view of the monthly data series during and since the latest recession in
February-April 2020, see the Appendix. The CPS was redesigned in 1994; among other things, this involved
switching from pencil-and-paper to computer-assisted interviewing, and the questionnaire was revised to ask
respondents directly whether they were available and wil ing to work ful -time. For details, see Anne E. Polivka
and Stephen M. Mil er, “The CPS After the Redesign: Refocusing the Economic Lens,” Chapter 7 of Haltiwanger,
Manser, and Topel, eds., Labor Statistics Measurement Issues, University of Chicago Press, 1998.

Three of the trends shown—the poverty rate, the percentage that is unemployed, and the
percentage that is underemployed—follow a similar up-and-down pattern with respect to
recessions and expansions. Increases in these percentages are associated with recessions and
decreases in these percentages occur during economic expansions, although sometimes the
decrease does not occur until several years into the expansion (notably, this was the case for the
three expansions prior to the current one).12
The percentage working part-time for non-economic reasons does not follow the same pattern as
the other three measures. During expansions, the percentage working part-time for non-economic
reasons tends to stay flat or rise, while the other three percentages tend to fall. Similarly, during
recessions the percentage working part-time for non-economic reasons tends to stay flat or fall, in

12 For further discussion and illustration of the poverty rate’s trend with respect to recessions and expansions, see CRS
Report R45854, Trends in the U.S. Poverty Rate after Recessions, by Joseph Dalaker.
Congressional Research Service

5

link to page 11 link to page 20 Underemployment, Recessions, and Poverty

contrast with the other three percentages, which rise. Except during the onset of the pandemic in
2020, which in a very short period affected people’s labor force choices and opportunities, and
during a methodological change to the survey in 1994, the percentage working part-time for non-
economic reasons tended not to rise or fall abruptly, unlike the other three groups shown.13
What Hourly Wage Rate is Needed for a Part-Time
Job to Keep Someone Out of Poverty?
The underemployed, by definition, are part-time workers. Whether a part-time worker is able to
stay out of poverty depends on the amount of income that person brings in, how many other
family members are present (if any), and the amount of income brought in by the other family
members.
A person’s poverty status is determined by comparing the person’s income, plus that of any
family members present, to a dollar amount called a poverty threshold, which represents a
restrictive level of need, and which varies according to the number of family members present to
reflect different levels of need for families of different sizes.14 For example, in 2020 (the latest
year for which thresholds have been computed as of the cover date of this report) a single adult
under age 65 whose income was less than $13,465 would have been considered to be living in
poverty.15 Poverty thresholds for selected family types (adult/child combinations) are shown in
Table 2.
Assuming that the underemployed person’s part-time job is the only source of family income
(i.e., none of the other present family members work, and the family does not receive other types
of income such as pensions, interest, public assistance, or rental income), then dividing the
poverty threshold by the number of hours worked in a year provides the lowest wage rate needed
to stay out of poverty.16 For example, the maximum number of hours a person can work in a week
and still be considered part-time is 34. Working all 52 weeks in a year at 34 hours per week, the
maximum number of hours a person can work in a year and still be considered a (full-year) part-

13 In 1994, the Current Population Survey underwent a major redesign of both the questionnaire and the tools used to
collect the data (from pencil-and-paper to computer-assisted interviewing). This change in the survey instrument
affected the data; therefore, the sudden decrease in the percentage underemployed and sudden increase in the
percentage working part-time for non-economic reasons may not be attributable to changes in workers’ preferences or
their availability to work full-time. As noted by Polivka and Miller, “The reduction in the proportion of the employed
classified as part-time for economic reasons most likely occurred because the unrevised CPS did not directly ask people
if they wanted to and were available to work full-time. Rather, individuals’ desire and availability to work full-time
were assumed from the answers provided for why they were working part-time. In the revised CPS individuals are
asked directly if they want to and are available to work full-time.” For further discussion, see Anne E. Polivka and
Stephen M. Miller, “The CPS After the Redesign: Refocusing the Economic Lens,” Chapter 7 of Haltiwanger, Manser,
and Topel, eds., Labor Statistics Measurement Issues, University of Chicago Press, 1998. An abrupt change in the
percentage working part-time for non-economic reasons occurred during the COVID-19 pandemic and the recession
that began in February 2020. These data are available in the Appendix.
14 The thresholds also vary by the ages of the family members present to reflect differences in the need levels between
children and adults. The thresholds are updated annually for inflation using the Consumer Price Index, and they reflect
amounts of income for the entire year. For further explanation, see CRS Report R44780, An Introduction to Poverty
Measurement, by Joseph Dalaker.
15 These are the official poverty thresholds, computed by the Census Bureau and used for statistical purposes. These
differ from the poverty guidelines computed by the Department of Health and Human Services, which are often used to
administer assistance programs. For further discussion, see CRS Report R44780, An Introduction to Poverty
Measurement, by Joseph Dalaker.
16 The poverty thresholds are based on income before taxes.
Congressional Research Service

6

link to page 11 Underemployment, Recessions, and Poverty

time worker is 1,768. Assuming the part-time job was the only source of income and the person
worked 1,768 hours per year, a single person under age 65 would have needed to earn at least
$7.62 per hour to stay above the poverty line according to the 2020 thresholds. For an adult
couple under 65, this figure was $9.80; for a single parent with one child, $10.09; for a single
parent with two children, $11.79; and for two adults and two children, $14.85. Part-time workers
in such family arrangements earning less than these hourly wage amounts would have needed
income earned by other family members or received from other sources to be classified as living
above the poverty level.17
Part-time workers do not always work 34 hours per week; the underemployed worked
approximately 22 hours per week, on average, in 2020. Table 2 displays the hourly wage rates
needed to avoid poverty at different numbers of part-time hours worked per week.
Table 2. Minimum Hourly Wage Needed to Avoid Official Poverty Status, by Selected
Poverty Thresholds and Weekly Part-Time Hours
Wage Rate Needed to Avoid Official Poverty
Status Assuming No Other Sources of Income and

52 Weeks of Work

Poverty
Threshold
34 Hours
22 Hours
in 2020
per
30 Hours
per
20 Hours
Family Size and Composition
Dollars
Weeka
per Week
Weekb
per Week
1 adult under age 65
$13,465
$7.62
$8.63
$11.77
$12.95
2 adults under age 65
$17,331
$9.80
$11.11
$15.15
$16.66
2 persons (one adult under age 65, one child)
$17,839
$10.09
$11.44
$15.59
$17.15
3 persons (one adult of any age, two children)
$20,852
$11.79
$13.37
$18.23
$20.05
4 persons (two adults of any age, two children)
$26,246
$14.85
$16.82
$22.94
$25.24
Source: Congressional Research Service computations using poverty thresholds from U.S. Census Bureau,
https://www2.census.gov/programs-surveys/cps/tables/time-series/historical-poverty-thresholds/thresh20.xls.
Notes: Weeks worked include paid vacations and paid sick leave. Analysis assumes one earner per family.
a. Maximum whole number of hours that may be worked per week for part-time employment status. Ful -time
work is defined as 35 hours or more per week.
b. The average number of hours worked per week in 2020 by the underemployed (part-time for economic
reasons) was approximately 22 hours; for details, see Bureau of Labor Statistics, https://www.bls.gov/cps/
cpsaat20.htm.

17 While below the poverty level or above the poverty level is a binary distinction, in reality individuals’ and families’
economic circumstances fall across a wide spectrum. The official poverty measure was designed to measure economic
hardship as opposed to economic adequacy. It was developed in the 1960s using food budgets that were designed by
the U.S. Department of Agriculture for families in economic distress; the ability of those plans to meet nutritional
requirements help to characterize the level of resources indicated in the food budgets, and by extension, the thresholds.
According to research available at the time, roughly half of families using the food budget met two-thirds of their
nutritional requirements, and roughly 1 in 10 met all their nutritional requirements (meaning that approximately 90%
did not). For further discussion and references, see CRS Report R44780, An Introduction to Poverty Measurement, by
Joseph Dalaker.
Congressional Research Service

7

Underemployment, Recessions, and Poverty

Poverty Among the Underemployed, Other
Workers, Nonworkers, and Their Family Members
Given that poverty is measured using information about the entire family (or whether a person
lives in a family), understanding the effects of work status on poverty requires an understanding
of how one person’s income from work affects all family members, if any are present. A single
comparison does not convey those effects completely. Multiple comparisons are needed because
families vary along multiple characteristics that can affect their poverty status:
 the number of persons present, which affects the poverty threshold to be used;
 the number of children present, which affects both the poverty threshold to be
used and the number of family members who may not be able to earn income
from work (and whose poverty status is therefore dependent on income from
other family members); and
 the number of adult nonworkers present, who may or may not receive income
from sources other than a current job (such as from Social Security, interest,
dividends, or pensions), or who may be retired, provide care for other family
members, or require care themselves.
The following sections examine poverty and work, particularly underemployment, using three
comparisons. The first compares the poverty status of the workers (and nonworkers) themselves
by type of worker, for persons aged 18 to 64. The work status categories being compared are
underemployed, working part-time for non-economic reasons, working full-time, and
nonworkers. This comparison is the simplest of the three because it looks only at the individual’s
work status. However, it does not illustrate the impact of the person’s work status on any other
family members who may be present.
The second comparison examines poverty rates by type of worker, using the same work status
categories as before, but this time including all family members who live with that type of
worker, in addition to the workers themselves. This comparison includes persons of all ages to
capture children whose poverty status depends on other family members. It also includes adults,
who may have jobs of their own but not necessarily the same type as the category’s focus.
Including everyone living with workers of a given type provides a better sense of how far-
reaching an effect that type of work status has on poverty throughout the whole population.
However, because people may live with more than one type of worker, the categories overlap—a
person may be in more than one category.
The third comparison examines the entire population and categorizes every person once, without
overlap, based on the number and type of workers in the person’s family. This last comparison
puts a greater emphasis on the number of workers present than on type of work status. For
instance, an underemployed worker may be the only worker in the family, may be one of two or
more part-time workers with no full-time workers present, or may be in a family where one or
more full-time workers are present. Thus, the categories of this third comparison do not isolate
the poverty rates associated with each type of work status but rather compare poverty rates when
multiple workers are present (and therefore, additional sources of income for the family),
compared with one or none, and examine how poverty rates differ by type of worker after first
categorizing by the number of workers present.
The distinctions between these comparisons will be illustrated using an example family, which
will be referred to throughout the rest of the report.
Congressional Research Service

8

link to page 14 Underemployment, Recessions, and Poverty

Example Family for Illustrating Work Status and Poverty Status

Calvin and Ivy, both 45 years old, live with their three children—Skylar (age 25), Frederika (age 14), and Rosie (age
11)—and Calvin’s mother Olive (age 75). Their poverty threshold in 2020 was $36,408 (six persons, two of whom
were children under age 18).
Calvin is a stay-at-home father and a nonworker, while Ivy works ful -time and earns $20,800 per year. Skylar
wants to work ful -time, but has only been able to find part-time work (she is underemployed), and earns $10,400
per year. Olive does not want a ful -time job, but has a part-time tutoring job earning $5,000 per year. The family
has no additional sources of income.

Calvin (nonworker): $0
Ivy (ful -time worker): $20,800
Skylar (underemployed worker): $10,400
Olive (part-time, non-economic reason): $5,000
Frederika (nonworker, under 18): $0
Rosie (nonworker, under 18): $0
Total: $36,200
Poverty threshold: $36,408

Their total income in 2020 was $36,200, which is less than their poverty threshold, meaning they are living in
poverty. Their income-to-poverty ratio (100 * $36,200 / $36,408) was 99%, putting them below poverty but not in
the deep poverty category. All family members have the same poverty status and the same ratio of income to
poverty.
Depth of Poverty Among Workers by Type of Worker
As noted previously, poverty status is based on a comparison of a family’s or unrelated
individual’s income with their poverty threshold: those with incomes less than the relevant
threshold, given the number of persons in the family and their ages, are considered to be living in
poverty. That comparison can be expressed as a fraction—income divided by the threshold—
called the ratio of income to poverty (or income-to-poverty ratio). Those with income-to-poverty
ratios of less than 1 are in poverty; those with ratios of 1 or greater are not in poverty. The ratio of
income to poverty is a measure of the depth of poverty because it indicates how far income is
below or above the poverty threshold. It is often expressed as a percentage: a ratio of 1
corresponds with 100% of the poverty level, a ratio of 0.5 corresponds with 50% of the poverty
level, 1.25 corresponds with 125% of the poverty level, and so on.
Figure 2 illustrates the percentage of persons aged 18 to 64 by income-to-poverty ratio (of their
family) and by their own work status. Categories shown are below 50% of the poverty threshold
(hereinafter referred to as deep poverty), 50% to 99% of the poverty threshold, 100% to 124% of
the threshold (hereinafter referred to as near poverty), and at or above 125% of the poverty
threshold (hereinafter referred to as above-near-poverty).
The underemployed are more likely to be in deep poverty than are persons working part-time for
non-economic reasons (7.2% compared with 4.3%), but they are less likely to be in deep poverty
than are nonworkers (17.0%). The underemployed are also more likely to be near poverty (just
above the poverty threshold) than are nonworkers: 6.8% compared with 6.1%. Full-time workers
were the least likely to be in poverty (3.3%).
Congressional Research Service

9

link to page 15 link to page 15
Underemployment, Recessions, and Poverty

Figure 2. Percentage of Workers and Nonworkers Aged 18 to 64 by
Ratio of Income to Poverty: 2020

Source: Congressional Research Service tabulations using data from U.S. Census Bureau, Current Population
Survey (CPS), 2020 Annual Social and Economic Supplement (ASEC).
Notes: Underemployed refers to persons working part-time for economic reasons (i.e., persons who want and
are able to work ful -time but cannot find ful -time work), or are working part-time temporarily because of slack
work (a reduction in hours in response to unfavorable business conditions) or seasonal work.

Example Family’s Depiction in Figure 2


Skylar is included in the top bar, for underemployed, in the pink region (50% to 99% of poverty).

Ivy appears in the third bar, for ful -time workers, in the pink region (50% to 99% of poverty).

Calvin is included in the fourth bar, for nonworkers, in the pink region.

Olive, Rosie, and Frederika do not appear in Figure 2 because they are not in the 18 to 64 age range.

Poverty Status by Type of Worker, Including All Other Family
Members Present
Figure 3 uses a different approach: the categories shown are based not only on the person’s own
work status but also on that of their family members, to illustrate the relationship between work
status and poverty so as to include all persons whose poverty status may potentially be affected
by the person’s work status. The categories are not mutually exclusive: a person may live
simultaneously with a full-time worker, a nonworker, an underemployed worker, and a person
working part-time for non-economic reasons. All persons are included in Figure 3, including
children below working age and persons aged 65 and older who are more likely to be retired than
younger persons. These groups are included because their poverty status may be affected by the
work status of their family members.
Looking at all persons who were either underemployed themselves or who lived with an
underemployed family member, 15.9% were in poverty, compared to 11.2% of those with no
underemployed persons present. When the population is grouped differently, to pool together
those who lived with someone who worked part-time for non-economic reasons compared with
those who did not, the pattern is the reverse: 8.9% of those living with such a part-time worker
Congressional Research Service

10

Underemployment, Recessions, and Poverty

were below poverty, compared to 12.0% of those who did not. This difference reflects the
difference in economic circumstances between the two types of part-time workers, and that, of
these two types of part-time work, underemployment is more closely associated with poverty. The
starkest difference in poverty rates is seen between those who lived with a full-time worker
versus those who did not: 4.8% of those who lived with such a worker were in poverty, compared
to 31.9% of those who did not.
Figure 3. Poverty Rates of Persons by Type of Worker(s) Present in the Family: 2020
(Poverty rates in percentages. Includes persons of all ages.
Unrelated individuals are treated as one-person families.)

Source: Congressional Research Service tabulations using data from U.S. Census Bureau, Current Population
Survey (CPS), 2020 Annual Social and Economic Supplement (ASEC).
Notes: Present indicates persons who are either the worker themselves or live with a family member who is
that type of worker. Not present indicates persons who are not that type of worker and do not live with any
family members who are that type of worker. Categories are not mutually exclusive: a person may live in a family
with a member who is underemployed, another member working part-time for non-economic reasons, and
another member working ful -time.

Congressional Research Service

11

link to page 15 link to page 15 link to page 15 link to page 15 link to page 17 link to page 9 Underemployment, Recessions, and Poverty

Example Family’s Depiction in Figure 3
This figure examines the relationship between type of work status and poverty, looking at one type of work status
at a time, and looking at the type of work’s effect on poverty throughout the whole population. The whole
population is included because one family member’s work status affects the poverty status of all other family
members present. All six family members are eligible to be included in Figure 3 because the population measured
includes all ages.
Each red bar answers the question, “if you or a family member are [type of worker], how likely are you to be in
poverty?”
Each pink bar answers the question, “if neither you nor any of your family members were [type of worker], how likely are
you to be in poverty?”

All six family members appear in the top red bar in Figure 3, because Skylar is underemployed (meaning that
for the rest of the family members, an underemployed family member is present), and the family is in poverty.

All six family members also appear in the middle red bar in Figure 3 because Olive is a part-time worker for
non-economic reasons, meaning that for the rest of the family, a part-time worker for non-economic reasons
is present, and they all are in poverty.

All six family members also appear in the bottom red bar in Figure 3 because they are in poverty and because
Ivy works ful -time.

Figure 4 focuses on patterns over six business cycles by showing percentages of the poverty, near
poverty, and above-near-poverty populations that were composed of persons who were
underemployed or who lived with an underemployed family member. Over the time period
shown, between 6% and 15% of the population below poverty were underemployed themselves
or lived with a family member who was underemployed. This percentage fluctuated over the
courses of past business cycles in a pattern similar to that shown in Figure 1 for the
underemployed workers themselves. These percentages help to characterize the share of the
poverty population affected in some way by underemployment: it is a lower percentage than those
affected by unemployment,18 but underemployment’s cyclicality may be relevant for
policymakers interested in alleviating poverty, especially during and immediately following
recessions, when the share of the poverty population that lived with an underemployed worker
also tended to spike.

18 Between 1987 and 2020, between 15% and 30% of the population below poverty was unemployed at some time
during the year (i.e., wanted and looked for a job and did not obtain one) or lived with a family member who was
unemployed; Congressional Research Service tabulation using data from the U.S. Census Bureau, Current Population
Survey, 1988-2021 Annual Social and Economic Supplements.
Congressional Research Service

12

link to page 15 link to page 15 link to page 18 link to page 15 link to page 15 link to page 18
Underemployment, Recessions, and Poverty

Figure 4. Percentages of the Population Below Poverty, Near Poverty, and
At or Above 125% of Poverty, that Were Underemployed or Lived With an
Underemployed Worker
(1975-2020)

Source: Congressional Research Service tabulations using data from the U.S. Census Bureau, Current
Population Survey (CPS), 1976-2021 Annual Social and Economic Supplements (ASECs). Recession dates are
from the National Bureau of Economic Research (NBER), at https://www.nber.org/cycles.html.
Notes: Underemployed refers to working part-time for economic reasons: persons who want to and are available
to work ful -time but cannot find ful -time work, or are working part-time due to slack work (a reduction in
hours in response to unfavorable business conditions) or seasonal work. Below poverty reflects income below
100% of the poverty threshold; near poverty reflects income from 100% to below 125% of the poverty
threshold.

Example Family’s Depiction in Figure 4

The dark red line (below poverty) is similar to the top red bar of Figure 3—below poverty, with at least one
underemployed worker present (either themselves or a family member). Like Figure 3, this includes persons of all
ages. The example family is included in the dark red line, in the data point for 2020, but it is not known what their
poverty status was in previous years.
The beige and blue lines also show persons with an underemployed worker present (which includes
underemployed individuals not living with family members, and entire families with one or more underemployed
members). The beige line includes those who are in near poverty, and the blue line those at or above near
poverty.

Poverty Status by Number and Type of Workers Present
Figure 5, unlike Figure 3, divides the entire population into mutually exclusive groups. While
Figure 3 focuses on the broadest reach of a person’s work status on their own and others’ poverty
status, Figure 5 focuses on the composition of the U.S. population by the number and type of
workers present. As noted previously, the focus is to illustrate the poverty status of the entire
population as it relates to the number and type of workers present, so children and retirees are
included.
Congressional Research Service

13

link to page 15
Underemployment, Recessions, and Poverty

As is shown in Figure 3, persons working full-time, or families with a full-time worker present,
have the lowest poverty rates. Furthermore, families with multiple part-time workers have
poverty rates that are higher than those with one full-time worker and no other workers.19
Figure 5. Poverty Rates by Number and Type of Workers Present in the Family: 2020
(Poverty rates in percentages.)

Source: Congressional Research Service tabulations using data from the U.S. Census Bureau, Current
Population Survey, 2021 Annual Social and Economic Supplement.
Notes: The categories shown include persons of all ages, including those not of working age, by the number and
type of workers in the family (if any family members are present). Unrelated individuals are treated as one-
person families, and are included in the “nonworkers only” category and the “one worker present” categories,
but not in families with “two or more workers present.” In families with two or more workers, part-time
workers include both those working part-time for non-economic reasons and underemployed workers.

Example Family’s Depiction in Figure 5

This figure divides the population into mutually exclusive and col ectively exhaustive categories. Every person in
poverty is represented in one of the bars shown. All family members are tallied into the same bar.
In the example family, three workers are present: Ivy, Skylar, and Olive. Because at least one of the workers (Ivy)
is a ful -time worker, all of the family members, including Calvin, Frederika, and Rosie, are tallied into the
bottommost bar.

Looking at persons who lived with one worker only, one who was a part-time worker, those who
lived with an underemployed worker had a poverty rate almost one-and-a-half times higher than
those who lived with someone who was working part-time for non-economic reasons: 41.0%
versus 27.5%. Again, whether the part-time work is for economic or non-economic reasons
affects the economic circumstances of the person and the person’s family.

19 By definition, unrelated individuals do not live with any family members, and as a result cannot have two or more
workers present—only one (themselves) or none.
Congressional Research Service

14

Underemployment, Recessions, and Poverty

Those in the nonworkers only category also had a high poverty rate (33.3%). This is lower than
the rate for those who were underemployed themselves or living with a single underemployed
worker, but recall that the nonworkers only category includes persons who may have been retired
and may have had sources of income other than a currently held job.
Conclusion
This report examines the underemployed population—those who were available to work and
wanted to work full-time but could not for economic reasons: either they could not find full-time
work or their current job had reduced their hours to part-time status because not enough work was
available. The underemployed population has historically had higher poverty rates than those
working part-time for non-economic reasons, as well as the population working full-time.
Underemployment follows patterns over the business cycle that are similar to those of both
poverty and unemployment: rising during and immediately following recessions, and falling
during expansions, which suggests there may be a connection among these trends. Over the past
45 years, between 6% and 15% of the population below poverty either was underemployed
themselves or lived with an underemployed family member. Because poverty is measured at the
family level (for those who live in families), underemployment is associated with a vulnerability
to poverty not only among the workers themselves but also their family members.
Underemployment’s relevance to poverty may be interpreted several ways. The underemployed
population, and their family members, have lower poverty rates than those with no job at all—and
nonworkers constitute the greatest share of the poverty population old enough to work. Those
who are underemployed and are still below poverty are less likely to have incomes below 50% of
their poverty threshold (deep poverty) compared with those without jobs. However, if the
expectation is that having a job, even a part-time job, is enough to protect people and their
families from poverty, historically that expectation has not been met. Because the similar up-and-
down patterns of unemployment rates, underemployment rates, and poverty rates over the course
of business cycles suggest there may be a connection between these trends, policymakers who
want to alleviate poverty may be interested in the connection between the availability of jobs and
the types of jobs available over the course of the business cycle.

Congressional Research Service

15

link to page 20 link to page 9 link to page 21 Underemployment, Recessions, and Poverty

Appendix. Monthly Estimates Since 2019
The official poverty measure is available on an annual basis only (it is released every September).
Except for the poverty rate, Table A-1 below shows the same categories that were displayed in
Figure 1: percentages of the civilian noninstitutional population age 16 and older that were
unemployed, underemployed, and working part-time for non-economic reasons. These same data
are plotted in Figure A-1 for a clearer view of these monthly data.
Table A-1. Percentage of the Civilian Noninstitutional Population Age 16 and Older
by Work Status
Part-Time for
Month and Year
Unemployed
Underemployed
Non-economic Reasons
January 2019
2.5
2.0
7.9
February 2019
2.4
1.7
8.0
March 2019
2.4
1.7
8.1
April 2019
2.3
1.8
8.1
May 2019
2.3
1.7
8.2
June 2019
2.3
1.6
8.1
July 2019
2.3
1.5
8.1
August 2019
2.3
1.7
8.2
September 2019
2.2
1.6
8.2
October 2019
2.3
1.6
8.2
November 2019
2.3
1.6
8.2
December 2019
2.2
1.6
8.2
January 2020
2.2
1.6
8.4
February 2020a
2.2
1.7
8.4
March 2020a
2.8
2.2
7.7
April 2020a
8.9
4.1
4.6
May 2020
8.1
4.0
5.4
June 2020
6.8
3.4
6.4
July 2020
6.3
3.2
6.7
August 2020
5.2
2.9
7.0
September 2020
4.8
2.4
7.1
October 2020
4.2
2.5
7.3
November 2020
4.1
2.5
7.0
December 2020
4.1
2.3
6.8
January 2021
3.9
2.2
6.9
February 2021
3.8
2.3
6.9
March 2021
3.7
2.2
7.2
April 2021
3.8
2.0
7.2
Congressional Research Service

16

Underemployment, Recessions, and Poverty

Part-Time for
Month and Year
Unemployed
Underemployed
Non-economic Reasons
May 2021
3.6
2.0
7.2
June 2021
3.6
1.7
7.6
July 2021
3.3
1.7
7.5
August 2021
3.2
1.7
7.7
Source: Congressional Research Service, using data from the Bureau of Labor Statistics, Current Population
Survey (CPS), dataset series LNU00000000 (civilian noninstitutional population age 16 and older), LNS13000000
(unemployed population, seasonally adjusted), LNS12032197 (working part-time for economic reasons, in non-
agricultural industries, seasonally adjusted), and LNS12032200 (working part-time for non-economic reasons, in
non-agricultural industries, seasonally adjusted). Recession date obtained from the National Bureau of Economic
Research (NBER), http://www2.nber.org/cycles/.
Notes: Underemployed reflects part-time work for economic reasons: working fewer than ful -time hours (35
hours per week) because ful -time work was not available or because of slack work (a reduction in hours in
response to unfavorable business conditions) or seasonal work. For a glossary of other terms, see
https://www.bls.gov/bls/glossary.htm.
a. NBER determined that a recession began in February 2020 and ended in April 2020.
Figure A-1. Percentage of the Civilian Noninstitutional
Population Age 16 and Older by Work Status

Source: Congressional Research Service, using data from the Bureau of Labor Statistics, Current Population
Survey (CPS), dataset series LNU00000000 (civilian noninstitutional population age 16 and older), LNS13000000
(unemployed population, seasonally adjusted), LNS12032197 (working part-time for economic reasons, in non-
agricultural industries, seasonally adjusted), and LNS12032200 (working part-time for non-economic reasons, in
non-agricultural industries, seasonally adjusted). Recession dates obtained from the National Bureau of Economic
Research (NBER), http://www2.nber.org/cycles/.
Notes: Underemployed reflects part-time work for economic reasons: working fewer than ful -time hours (35
hours per week) because ful -time work was not available or because of slack work (a reduction in hours in
response to unfavorable business conditions) or seasonal work. For a glossary of other terms, see
https://www.bls.gov/bls/glossary.htm. NBER determined that a recession began in February 2020 and ended in
April 2020.

Congressional Research Service

17

Underemployment, Recessions, and Poverty

Author Information

Joseph Dalaker

Analyst in Social Policy

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material.

Congressional Research Service
R46939 · VERSION 1 · NEW
18