Discouraged workers
Topic: Employment, Unemployment and Informalisation · NCERT: Beyond NCERT
Meaning
Discouraged workers are people who want a job but have stopped searching because they believe no jobs are available. They are neither working nor seeking work, so surveys count them as not in the labour force. They are not counted as unemployed. This makes the unemployment rate look lower than it really is. It also pulls down the labour force participation rate (LFPR), which is the share of people who are working or looking for work.
Example
A young graduate in a small town applies for jobs for two years, gives up and stays at home. In the survey, they drop out of the labour force, and the measured unemployment rate falls, even though nothing has improved.
Don't confuse with
- Unemployed: people who are not working but are actively seeking or available for work. Discouraged workers have stopped seeking.
- Voluntary unemployment: choosing not to work at the prevailing wage. Discouraged workers want work but have lost hope of finding it.
Related concepts
- Labour force
- Not in labour force
- Labour force participation rate
- Worker population ratio
- Unemployment rate
- Usual status
- Principal status
- Subsidiary status
- Current weekly status
- Current daily status