Theoretical Concept of Labor Underutilization - How to Optimize Labor Demand?

Abstract

In the traditional approach, labor underutilization are equated with unemployment, and its size is determined by the number of unemployed or the unemployment rate. Currently, however, this concept is beginning to be interpreted much more broadly. Because employees can also be a source of labor underutilization in enterprises. The main aim of the article is to analyze and evaluate the theoretical concept of labor underutilization. There are different theoretical approaches to explaining the emerging labor underutilization in enterprises. Sources of labor underutilization can be time-related underemployment, the mismatch skills and labor demand and the need to labor hoarding during economic slowdown. Each of them is guided by separate assumptions and research questions, but ultimately they create theoretical concept of labor underutilization.