This study explores whether self-esteem is adversely affected by economic underemployment as defined by unemployment, involuntary part-time employment, intermittent unemployment, and poverty income in a group of recent school-leavers. Results indicate that self-esteem was significantly lower in each of the economically underemployed groups relative to the adequately employed after controlling for early self-esteem, socio-economic status, gender, ethnicity, aptitude, age, and education. There were no differences in self-esteem among the economically underemployed groups after adjusting for the control variables. Economic underemployment proved to be a distinct concept relative to self-reported job satisfaction. Underemployment was negatively related to self-esteem after controlling for perceived job satisfaction and the other control variables. Our findings suggest a need for societal attention to the levels of underemployment on par with the attention given to monitoring traditional unemployment levels.