Using information collected by the 2001 Household Income and Labour Dynamics in
Australia (HILDA) survey, I investigate the factors associated with underemployment,
defined as a situation where a part-time employed person would like to work more hours in
order to increase income. Multinomial logit models are estimated of labour force status in
which underemployment is distinguished from other part-time employment. Effects of a wide
range of personal and neighbourhood characteristics are examined, including family
background, employment history and local labour market conditions. Underemployment is
found to have many predictors in common with unemployment, but also a number of
differences. Additional models are estimated on employed persons only that investigate the
job characteristics associated with underemployment. Relatively few job characteristics
predict underemployment as distinct from other part-time employment.