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Discouraged worker

From Wikipedia, the free encyclopedia

Distribution of the civilian noninstitutional population 16 years and older, first quarter 2009 (US)
Distribution of the civilian noninstitutional population 16 years and older, first quarter 2009 (US)
Persons not in the labor force selected indicators quarterly averages 1994–2009 not seasonally adjusted (US)
Persons not in the labor force selected indicators quarterly averages 1994–2009 not seasonally adjusted (US)

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 he is 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.[1]

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. Although some countries offer alternative measures of unemployment rate, the existence of discouraged workers can be inferred from a low employment-to-population ratio.

United States

Discouraged Workers (US, 2004-09)
Discouraged Workers (US, 2004-09)

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 and who has looked for work sometime in the past 12 months (or since the end of his or her last job if a job was held within the past 12 months), but who is not currently looking because of real or perceived poor employment prospects.[2][3][4]

The Bureau of Labor Statistics does not count discouraged workers as unemployed but rather refers to them as only "marginally attached to the labor force".[5][6][7] This means that the officially measured unemployment captures so-called "frictional unemployment" and not much else.[8] This has led some economists to believe that the actual unemployment rate in the United States is higher than what is officially reported while others suggest that discouraged workers voluntarily choose not to work.[9] Nonetheless, the U.S. Bureau of Labor Statistics has published the discouraged worker rate in alternative measures of labor underutilization under U-4 since 1994 when the most recent redesign of the CPS was implemented.[10][11]

The United States Department of Labor first began tracking discouraged workers in 1967 and found 500,000 at the time.[12] Today, In the United States, according to the U.S. Bureau of Labor Statistics as of April 2009, there are 740,000 discouraged workers.[13][14] There is an ongoing debate as to whether discouraged workers should be included in the official unemployment rate.[12] Over time, it has been shown that a disproportionate number of young people, blacks, Hispanics, and men make up discouraged workers.[15][16][17] Nonetheless, it is generally believed that the discouraged worker is underestimated because it does not include homeless people or those who have not looked for or held a job during the past twelve months and is often poorly tracked.[12][18]

According to the U.S. Bureau of Labor Statistics, the top five reasons for discouragement are the following:[19][20]

  1. The worker thinks no work is available.
  2. The worker could not find work.
  3. The worker lacks schooling or training.
  4. The worker is viewed as too young or too old by the prospective employer.
  5. The worker is the target of various types of discrimination.


In Canada, discouraged workers are often referred to as hidden unemployed because of their behavioral pattern, and are often described as on the margins of the labour force.[21] Since the numbers of discouraged workers and of unemployed generally move in the same direction during the business cycle and the seasons (both tend to rise in periods of low economic activity and vice versa), some economists have suggested that discouraged workers should be included in the unemployment numbers because of the close association.[21]

The information on the number and composition of the discouraged worker group in Canada originates from two main sources. One source is the monthly Labour Force Survey (LFS), which is a monthly survey that provides an estimate of both employment and unemployment.[22] The LFS’ definition of discouraged workers has not changed since 1997. It is defined as people who were willing and available to work during the reference week but did not work because they believed there was no suitable work available.[23] The other source is the Survey of Job Opportunities (SJO), which is much closer in design to the approach used in many other countries. In this survey, all those expressing a desire for work and who are available for work are counted, irrespective of their past job search activity.[21]

In Canada, while discouraged workers were once less educated than "average workers", they now have better training and education but still tend to be concentrated in areas of high unemployment.[1][21] Discouraged workers are not seeking a job for one of two reasons: labour market-related reasons (worker discouragement, waiting for recall to a former job or waiting for replies to earlier job search efforts) and personal and other reasons (illness or disability, personal or family responsibilities, going to school, and so on).[1]

The table below uses the data from the LFS since 2016. Unemployment was slowly rising from the year 2016 where it was 10,115,700 people to 2019 where the number increased to 10,555,000 people. Similar to the rest of the world, the Covid-19 pandemic caused an even greater increase in the total unemployment, affecting a high of 11,156,000 people. Among the set of the population classified as discouraged workers, there is a greater rise, going from 21,800 people in 2019 to 70,400 in 2020.[24]

LFS Reason for not looking for work x 1000: Both sexes, ages 15 and older.[24]

2016 2017 2018 2019 2020
Total not in the labor force 10115.7 10234.0 10488.6 10555 11156
Discouraged workers 30.5 24.7 21.7 21.8 70.4
Not in the labor force but wanted work 407.7 396 374.9 366.5 722.6

It is worth noting that there is a vast population of Aboriginal people that reside in Canada. Canada classifies the following  three groups under the broad term Aboriginal: the First Nations, Inuit, and the Metis. Statistics Canada does not measure Aboriginal unemployment separate from the population as a whole, but the Aboriginal people make up a big portion of the unemployed and discouraged worker count. The 2008 recession hit the Aboriginals harder than the rest of the population, which created a pattern of high rates of unemployment and discouraged workers.[25]

The Aboriginal have greater restrictions to work than the normal population due to race, lower human capital, and education. These factors subject the population to more part-time-part-year work, layoffs, job loss and lower pay. Dealing with this over time produces more discouraged workers, and produces a smaller labor force participation. Aboriginal peoples were three times as likely to be discouraged workers than the rest of the population.[25]


In Australia, discouraged workers are recorded by the Australian Bureau of Statistics (ABS) into a category of potential workers who are not actively seeking work. In order to be categorized as discouraged, individuals must a) want to work, b) be available to start working within 4 weeks, and c) are not actively applying for jobs because they are discouraged. According to ABS, there were 808,000 persons classified as unemployed in February of 2021 plus an additional 1.157 million marginally attached to the labor force.[26] The 113,000 discouraged workers fall into this marginally attached group.

The top three reasons that discouraged workers in Australia did not actively seek work in the week prior were:

  1. Considered too young or too old by employers
  2. No jobs in locality, line of work or no jobs at all
  3. No jobs in suitable hours[26]

The table below shows how there has been an overall increase in the number of discouraged workers in Australia, even with decreases from 2015 to 2016 and again from 2018 to 2019.[26] As with many other countries, the number of discouraged workers increases during times of economic downturn which would explain the increases seen in 2020 and 2021 during the COVID-19 pandemic.[27] Additionally, women are more likely to be discouraged workers than men in Australia.[28]

Australia Unemployed & Discouraged Workers[26]












2015 761,200 106,400 48,900 57,500
2016 717,500 101,200 42,400 58,800
2017 747,800 100,300 42,200 58,100
2018 734,700 101,500 42,900 58,600
2019 665,100 90,100 40,500 49,600
2020 695,700 103,00 45,800 57,200
2021 805,200 113,000 52,100 60,900

The Centre for Aboriginal Economic Policy Research (CAEPR) at The Australian National University has done further research of discouraged workers within Australia’s Indigenous population. As discussed by Hunter and Gray, Indigenous Australians are more than three times more likely to become discouraged than the Australian population as a whole.[28] Similar to what is seen in the entire Australian population, Indigenous females experience higher rates of discouraged workers as compared to males.[28] The top two reasons for becoming discouraged for the indigenous population as a whole were “childcare and other family responsibilities” and “studying/returning to studies.”[28]

European Union

Unemployment statistics published according to the ILO methodology may understate actual unemployment in the economy.[29] The EU statistical bureau EUROSTAT started publishing figures on discouraged workers in 2010.[30] According to the method used by EUROSTAT there are 3 categories that make up discouraged workers;

  • underemployed part-time workers
  • jobless persons seeking a job but not immediately available for work,
  • persons available for work but not seeking it

The first group are contained in the employed statistics of the European Labour Force Survey while the second two are contained in the inactive persons statistics of that survey. In 2012 there were 9.2 million underemployed part-time workers, 2.3 million jobless persons seeking a job but not immediately available for work, and 8.9 million persons available for work but not seeking it, an increase of 0.6 million for underemployed and 0.3 million for the two groups making up discouraged workers.[31]

If the discouraged workers and underemployed are added to official unemployed statistics Spain has the highest number real unemployed (8.4 Million), followed by Italy (6.4 Million), United Kingdom (5.5 Million), France (4.8 Million) and Germany (3.6 Million).

List of EU countries hidden unemployment in 2012[32]
Country Underemployed Part-time workers
Jobless persons seeking a job but not immediately available for work
Persons available for work but not seeking it
 Belgium 158 100 60 369
 Bulgaria 29 270 26 410
 Czech Republic 27 62 17 367
 Denmark 88 69 24 219
 Germany 1,810 582 508 2,316
 Estonia 10 41 3 71
 Ireland 147 44 13 316
 Greece 190 91 36 1,204
 Spain 1,385 1,071 236 5,769
 France 1,144 285 444 3,002
 Italy 605 2,975 111 2,744
 Cyprus 20 15 3 52
 Latvia 44 67 6 155
 Lithuania 37 16 197
 Luxembourg 5 13 2 13
 Hungary 88 215 11 476
 Malta 5 5 12
 Netherlands 138 308 85 469
 Austria 148 144 39 189
 Poland 344 632 102 1,749
 Portugal 256 232 29 860
 Romania 239 458 701
 Slovenia 18 13 90
 Slovakia 37 41 13 378
 Finland 75 111 63 207
 Sweden 237 134 101 403
 United Kingdom 1,907 774 334 2,511
 Norway 81 67 22 85

See also

United States



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Further reading

External links

United States


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