Discouraged Workers: The U-4 Rate

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"The BLS defines discouraged workers as those who want a job but are not actively searching for one because they believe there are no jobs available for them. Since discouraged workers are not actively searching for a job, they are considered nonparticipants in the labor market—that is, they are neither counted as unemployed nor included in the labor force"(B. Ravikumar and Lin Shao). Discouraged workers represent less than 9% of the unemployed. An alternative way to calculate unemployment is the U-4 rate, which adds the discouraged workers into the number. The normal unemployment rate does not calculate discouraged workers into the number, because they are not actively seeking a job. The U-4 rate is always higher than the unemployment rate
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