Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/210960 
Year of Publication: 
2019
Series/Report no.: 
Discussion Papers No. 906
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
Discouraged workers are those who have given up search due to (perceived) low chances of obtaining work. In this paper we first develop a model for the probability of being in the labor force as a function of the probability of getting an acceptable job offer. This model is based on standard search theory and it is consistent with the notion of aggregate rationality. Second, we apply this model to analyze and compare the discouraged worker effect for two categories of Norwegian females: immigrants from non-Western countries and Norwegian-born. The empirical results show that estimated search cost (disutility) per unit of time is much higher for the Norwegian-born than for immigrants whereas total (expected) estimated search cost is - on average - higher for immigrants. We also propose an alternative measure of unemployment which includes the discourage worker effect.
Subjects: 
Discouraged workers
Modified unemployment rate
Aggregate rational expectations
Female immigrants
Labor force participation
Panel data
Random utility modeling
JEL: 
C33
C35
J21
J22
J61
J64
Document Type: 
Working Paper

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