Older Workers, Unemployment, and the Discouraged Worker Effect

In times of recession poor job prospects may lead some workers to leave the labour force early whilst others, particularly married women, are likely to be discouraged from entering or re-entering the labour force. This effect is conventionally termed the “discouraged worker” effect. The purpose of this article is to investigate the extent of the discouraged worker effect among older workers using Labour Force Survey data for 1981 and 1983 ( ¹ ). The first section of the paper examines the discouraged worker hypothesis and the problems involved in measuring the discouraged worker effect. Then we consider the extent of discouragement among older workers and compare the discouraged worker rate with the unemployment figures for older workers.