What Effect Does the Existence of Discouraged Workers Have on the Ability

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The Answer is Discouraged workers are individuals who have stopped searching for employment because, for example, they have become "discouraged" with the prospects of finding employment. Once they stop searching, they are no longer counted as unemployed and, therefore, in the labour force. Such a dynamic would cause the official unemployment to decrease. This explains why the existence of discouraged workers can cause the unemployment rate to be an imperfect measure of the utilisation of labour. In fact, many discouraged workers would accept job offers when they arise even though they are not actively seeking employment in the labour market. Hence economists sometimes look at the employment rate as an additional measure to supplement our understanding of the state of the labour market. The employment rate is the ratio of employment to population available for work.

What Effect Does the Existence of Discouraged Workers Have on the Ability

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