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Measuring Underemployment in Illinois: Alternative Measures of Labor Underutilization

(April 2025)

Following the pandemic in 2020, the Illinois unemployment rate appears to have largely recovered to pre-pandemic levels. However, despite this seemingly good news, it is possible that the unemployment rate does not fully capture the labor force status of many Illinoisans, especially those who have stopped looking for work. In addition to the official unemployment rate, there are alternative measures developed by the U.S. Bureau of Labor Statistics (BLS) for the U.S. and states that attempt to measure underemployment or labor underutilization.

The six alternative measures include:

  • U-1, persons unemployed 15 weeks or longer, as a percent of the civilian labor force;
  • U-2, job losers and persons who completed temporary jobs, as a percent of the civilian labor force;
  • U-3, total unemployed, as a percent of the civilian labor force (the official unemployment rate);
  • U-4, total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers;
  • U-5, total unemployed, plus discouraged workers, plus all other marginally attached workers, as a percent of the civilian labor force plus all marginally attached workers; and
  • U-6, total unemployed, plus all marginally attached workers, plus total employed part-time for economic reasons​, as a percent of the civilian labor force plus all marginally attached workers.

The chart above shows 12-month moving average U-3 rates (the official unemployment rate) and U-6 rates (the most inclusive measure of underemployment) for Illinois and the U.S. Throughout the past decade, the Illinois U-3 and U-6 rates have tracked closely, moving in the same direction and reflecting contractions and expansions in the economy. The average Illinois U-6 rate peaked at 15.3 percent in March 2021 and fell to its lowest level, 7.4 percent, in May 2023, before rising to 8.7 percent as of March 2025.

By comparison, the average Illinois U-3 rate also peaked in March 2021 at 9.9 percent and dropped to its lowest level, 4.1 percent, in May 2023. Since then, the average Illinois U-3 rate has risen to 4.9 percent as of March 2025. The differences between the average Illinois U-3 and U-6 rates, initially at 5.4 points in March 2015, fell to 3.4 points in February 2020, and rose again to 5.4 points in March 2021. Since then, the difference has fallen and remained steady between 3.0 and 4.0 points.

Nationally, the average U-6 rate decreased from 11.6 percent in 2015 and peaked in March 2021 at 14.5 percent. It then reached a low of 6.7 percent in mid-2023, before rising to above 7.0 percent in April 2024. In March 2025, the average U-6 rate was 7.7 percent. Meanwhile, the gap between the U.S. U-3 and U-6 rates ranged from 3.1 points in June 2023 to 5.8 points in March 2021.

Both the average national U-3 and U-6 rates have been consistently lower than the average Illinois U-3 and U-6 rates for nearly all the past decade. The Illinois-U.S. U-3 rate differences have ranged from 0.3 point in late 2018 to more than 1.2 points in early 2021. The Illinois-U.S. U-6 rate differences have ranged from 0.1 point in May 2015 to 1.5 points in mid-2024. Only during the COVID-19 pandemic, in March and April 2020, did the US-6 rate surpass the Illinois U-6 rate by 0.1 point.

A report with 12-month average U-3, U-6 rates for Illinois and the U.S. can be found here​.

The source for the U-3 and U-6 rates is the national household survey known as the Current Population Survey (CPS). We used 12-month averages to reduce the impact of the relatively high sampling error from the small Illinois CPS household sample and seasonal patterns. U-6 rates are not available for geographic areas below the state due to insufficient CPS household sample and data reliability concerns.

Monthly national U-1 through U-6 rates are available from the U.S. BLS at https://www.bls.gov/webapps/legacy/cpsatab15.htm. The BLS also produces four-quarter average alternative measures of labor utilization for the U.S. and all states every three months. These alternative measures are available at https://www.bls.gov/lau/stalt.htm​.