What is the term for unemployment that occurs when workers are over-qualified for their jobs?

The term that describes unemployment occurring when workers are over-qualified for their jobs is underemployment. This situation arises when individuals hold jobs that do not fully utilize their skills, education, and experience, resulting in a mismatch between their qualifications and the job requirements. Underemployment can happen even when individuals are technically employed, as they may be working in positions that do not reflect their capabilities or professional aspirations.

In contrast, seasonal unemployment refers to job loss related to seasonal fluctuations in demand for certain jobs, such as in agriculture or tourism. Frictional unemployment occurs when individuals are temporarily without work while transitioning between jobs, often due to voluntary factors like relocating or seeking more favorable employment. Demand-deficient unemployment, on the other hand, results from insufficient demand in the economy, leading to overall job losses and higher unemployment rates.

Thus, underemployment is specifically focused on the mismatch of qualifications to job roles, making it the correct term in this context.