While underemployment in Australia remains steady at 5.9 per cent, new CEIC statistics has outlined a stark difference between male and female underemployment rates.
As of January 2026, 6.9 per cent of women in Australia were underemployed, two per cent higher than the rate for Australian men.
Unlike unemployment, underemployment refers to situations where employees are not working to their full capacity.
Experts say that cost-of-living pressures are just one reason contributing to a greater demand for working hours.
University of Wollongong Professor, Alfredo Paloyo said underemployment is largely driven by the structure of the labour market.
“The underemployment rate is where it has been for several years,” Professor Paloyo said.
“Underemployment in Australia is structurally elevated rather than cyclically driven.”
A large share of jobs are part-time or casual by design, particularly in service, retail, hospitality and care industries.
Prof Paloyo said the hardest part of combatting underemployment weighs on employees rather than employers, particularly in casual work where employees are not compensated for missing hours.
He believes that underemployment gender-disparities is largely due to the type of work that women are more likely to do.
“Women are far more likely to be in part-time work to begin with, which is where most underemployment sits,” Prof Paloyo said.
Previous research shows that men are more likely to be working part-time involuntarily, seeking full-time hours.
These trends are largely driven by how the workforce is structured, with women more likely to be employed in industries like retail, hospitality and care, where part-time work is more common.
“The most common reason women are not available for more hours is caring for children,” Prof Paloyo said.
“Underemployment is a measure of job quality rather than job quantity,
“It tells you that a meaningful share of jobs are structured with fewer hours than workers want.”
Source: ANZ Bank
UOW Professor, Martin O’Brien said the outlook for underemployment would largely reflect broader economic conditions, with upcoming monetary policy decisions likely to play a role.
“Another increase in interest rates could slow economic activity and increase both unemployment and underemployment,” he said.
He said any changes may also be uneven across industries, with sectors such as retail and hospitality more exposed to shifts in demand, where underemployment is already more prevalent.
Additional reporting: Teagan Pritchard
Feature image: Victoria government
