When a worker works at most 35 hours a week and wants to work more, he is said to be underemployed. In addition, when his skills are underutilized, there is uncertainty about the job, he is underpaid and there is lack of formal working conditions, he is said to be multidimensionally underemployed. This paper analyzes youth underemployment multidimensionality and its effect on wages in three Western Balkan countries: North Macedonia, Serbia, and Montenegro. Our empirical approach controls for sample-selection bias and endogeneity through internally-generated instruments. The findings suggest that intensifying underemployment along the multidimensional scale reduces wage on average by 7.6%. The effect is the strongest in North Macedonia, followed by Montenegro and Serbia.
Nota bibliográficaFunding Information:
This research work was carried out with financial and scientific support from the Partnership for Economic Policy (PEP) www.pep-net.org with funding from the Department for International Development (DFID) of the United Kingdom (or UK Aid), and the Government of Canada through the International Development Research Center (IDRC). The authors are grateful to Luca Tiberti and Marjan Petreski for the valuable comments and suggestions, as well as to Ivan Vchkov for technical support and guidance.