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A significant increase in the number of 'discouraged workers'—individuals who have stopped actively searching for a job because they believe none are available—will lead to a direct increase in the officially reported unemployment rate.
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Formula for Unemployment Rate
Which of the following scenarios would most likely cause a country's official unemployment rate to decrease, even if the total number of people with jobs remains unchanged?
Interpreting Labor Market Changes
Correcting a Misconception about Unemployment
A significant increase in the number of 'discouraged workers'—individuals who have stopped actively searching for a job because they believe none are available—will lead to a direct increase in the officially reported unemployment rate.