Discussion Papers no. 453

Evidence from micro data

Analysis of the discouraged worker phenomenon

In this paper we analyze labor force participation with particular reference to the discouraged worker effect. The theoretical point of departure is a simple model where the worker evaluates the expected utility of searching for work, and decides to participate in the labor market if the expected utility of the search exceeds the utility of not working. With suitable assumptions about unobserved and observed heterogeneity we derive an empirical model for the probability that the worker will be unemployed or employed as a function of the probability of getting a job, given that the worker searches for work. The model is estimated on Norwegian micro-data consisting of independent cross sections over 15 years. The results indicate that there is a substantial discouraged worker effect.

Om publikasjonen

Tittel

Analysis of the discouraged worker phenomenon. Evidence from micro data

Ansvarlige

John K. Dagsvik, Terje Skjerpen, Tom Kornstad

Serie og -nummer

Discussion Papers no. 453

Emne

Discussion Papers

Antall sider

34

Målform

Engelsk

Om Discussion Papers

Discussion papers comprise research papers intended for international journals and books. A preprint of a Discussion Paper may be longer and more elaborate than a standard journal article as it may include intermediate calculations, background material etc.

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