Definition and Characteristics of Discouraged Workers
– A discouraged worker is a person of legal employment age who is not actively seeking employment or who has not found employment after long-term unemployment.
– They would prefer to be working but have given up looking for a job.
– Reasons for becoming a discouraged worker include a shortage of jobs, discrimination, lack of skills or experience, chronic illness or disability, or lack of success in finding a job.
– Discouraged workers are not considered part of the labor force and are not counted in most official unemployment rates.
– They are often classified as marginally attached to the labor force or part of hidden unemployment.
– Discouraged workers often face barriers such as lack of skills, education, or experience that hinder their job search.
– They may have experienced repeated rejections or long-term unemployment, leading to a loss of motivation.
– Discouraged workers may have a higher likelihood of experiencing mental health issues or social exclusion.
Discrimination and Discouraged Workers
– Discrimination in the workplace can lead to individuals becoming discouraged workers.
– Minorities, such as African Americans and ethnic and racial minorities in Europe, are more likely to become discouraged workers due to discrimination.
– Discrimination causes feelings of helplessness and decreases self-efficacy, leading to discouragement.
– Studying discouraged workers is important as it is related to major social problems like minority discrimination and lack of diversity.
– Discrimination can be a barrier to finding employment and contributes to the hidden unemployment represented by discouraged workers.
Factors Influencing Discouraged Workers
– The decision of whether to participate in the labor force is related to the unemployment rate in the region.
– The discouraged worker effect gets stronger when the unemployment rate exceeds a certain level.
– Young workers are most dependent on the business cycle for their decision to participate in the labor force.
– There is a linear relationship between added workers and discouraged workers among prime-age females.
– Older workers experience more discouraged worker effects during the exception phase, when the unemployment rates of workers departed.
Discouraged Workers in the United States
– In the United States, a discouraged worker is defined as a person not in the labor force who wants and is available for a job but is not currently looking due to poor employment prospects.
– The Bureau of Labor Statistics does not count discouraged workers as unemployed but refers to them as marginally attached to the labor force.
– The actual unemployment rate in the United States may be higher than officially reported due to the exclusion of discouraged workers.
– The number of discouraged workers in the United States is estimated to be higher than reported, as it does not include homeless individuals or those who have not looked for or held a job in the past twelve months.
– Disproportionate numbers of young people, blacks, Hispanics, and men make up the population of discouraged workers in the United States.
Discouraged Workers in Other Countries
– In Canada, discouraged workers are often referred to as hidden unemployed and are on the margins of the labor force.
– The number of discouraged workers in Canada has been increasing, with a rise from 21,800 people in 2019 to 70,400 in 2020.
– In Australia, discouraged workers are categorized as potential workers who are not actively seeking work but still want to work and are available to start within 4 weeks.
– The number of discouraged workers in Australia has increased overall, with fluctuations in certain years.
– EUROSTAT, the EU statistical bureau, started publishing figures on discouraged workers in 2010.
– The discouraged worker effect in India mainly affects women or secondary income earners in households. Source: https://en.wikipedia.org/wiki/Discouraged_worker
The examples and perspective in this article may not represent a worldwide view of the subject. (December 2010) |
In economics, a discouraged worker is a person of legal employment age who is not actively seeking employment or who has not found employment after long-term unemployment, but who would prefer to be working. This is usually because an individual has given up looking, hence the term "discouraged".
A discouraged worker, since not actively seeking employment, has fallen out of the core statistics of the unemployment rate since they are neither working nor job-seeking. Their giving up on job-seeking may derive from a variety of factors including a shortage of jobs in their locality or line of work; discrimination for reasons such as age, race, sex, religion, sexual orientation, and disability; a lack of necessary skills, training, or experience; a chronic illness or disability; or simply a lack of success in finding a job.
As a general practice, discouraged workers, who are often classified as marginally attached to the labor force, on the margins of the labor force, or as part of hidden unemployment, are not considered part of the labor force, and are thus not counted in most official unemployment rates—which influences the appearance and interpretation of unemployment statistics.
One of the reasons why people become discouraged workers is discrimination in the workplace. The research found that minorities are more likely to become discouraged workers due to discrimination. The minorities, such as African Americans, ethnic and racial minorities in Europe, and older workers, tend to become discouraged workers more than others. Discrimination leads workers to be discouraged workers because discrimination caused feelings of helplessness and uncontrollability and decreases a level of self-efficacy. The studies of discouraged workers are undertaken, as it is seen as "hidden unemployment". However, it is related to major social problems like minority discrimination and the lack of a diverse community.
There are not significant behavioral patterns of labor force participation across age-sex groups in the business cycle. It is related to the unemployment rate in the region. Generally, the discouraged worker effect gets stronger when the unemployment rate exceeds a certain level. Young workers are most dependent on the business cycle, regarding the decision of whether to participate in the labor force. There is a linear relationship only among the prime-age female between the added workers and the discouraged workers. The discouraged worker effects appear more for older workers during the exception phase, which is the phase when the unemployment rates of workers departed.