New study finds 6 types of ‘discouraged’ workers in Australia – and why they stop job-hunting
- Written by: Sora Lee, Lecturer in Ageing and End of Life, La Trobe University
When we hear that Australia’s unemployment rate is low, it sounds like good news. The Australian Bureau of Statistics defines an unemployed person as someone who is not working but is actively looking for a job and available to start.
But there is a broader group not fully captured by the statistics, whom we call “hidden workers”. They include people who:
are unemployed but not counted because they are not currently looking
are underemployed, working fewer hours than they want or need
or who have given up looking altogether, known as discouraged workers.
This article focuses on that last group: discouraged workers.
They still want to work and are available — but have stopped searching. We know surprisingly little about who they are or why they give up. My new research aims to answer some of these questions.
Untapped talent matters for the economy
You might wonder: if they are not looking for work, why should we care?
Because they represent unused talent, sitting on the sidelines of the economy. Discouraged workers are part of what economists call labour market slack. That simply means spare capacity: people who could work if the barriers in front of them were removed.
If slack is larger than the official unemployment rate suggests, then the job market is not as strong as it looks.
And that matters.
The Reserve Bank of Australia relies on labour market data when deciding whether to raise or cut interest rates. If there are more people on the sidelines than the headline figures capture, wage growth may be weaker than expected. Inflation pressures may be lower than assumed. Economic strength may be overstated.
In short, when we miscount workers, we misread the economy.
A wide range of profiles
Using national data from the Household, Income and Labour Dynamics in Australia survey (HILDA), we analysed 1,091 discouraged workers. This is the first in-depth national analysis of discouraged workers in Australia, and the findings are revealing.
Instead of treating discouraged workers as one single group, we used a statistical method called “latent class analysis”. It helps us see hidden subgroups within the broad category.
The six profiles we identified were:
Young, low-educated adults (mostly men) (25.3%)
This is the largest group. They are under 45, rarely married and often left school early. They report more health issues and face limited qualifications and weak attachment to stable work.
Older, low-educated adults with chronic health problems (20.4%)
Almost all are over 45. Many did not complete secondary school. Most have long-term health conditions. Here, low education and poor health combine to reduce job prospects.
Older single adults with health and financial strain (17.0%)
These people are often educated but single, with high rates of chronic illness and financial hardship. Education does not protect them when health and money pressures are severe.
Older, well-educated adults (mostly men) (16.6%)
These are mainly people over 45 who are married and relatively well educated. Many report some health problems. Their discouragement appears linked to age bias in hiring and moderate health limits, rather than low skills.
Mothers with heavy care and financial strains (13.9%)
These are mostly women under 45 with dependent children. Many also provide unpaid care to someone else in the family. Financial stress is high.
Highly educated married women facing structural barriers (6.7%)
This is a smaller but striking group. They are well educated and generally healthy. Many are married and have children. Their discouragement reflects the strain of combining paid work with care.
The myth of the lazy jobless persists
A common myth is that people stop looking for work because they are unmotivated.
Our findings show something different.
Discouragement often emerges at the point where repeated rejection, health limits, childcare costs, age discrimination or household pressures make further job searches feel pointless. As one interview participant put it,
When you keep receiving rejection letters, it becomes rational to stop applying.
The evidence suggests discouragement is rarely a sudden decision. It is more often the end point of accumulated disadvantage — where multiple barriers build up over time until withdrawal feels like the only realistic option.
We identified clear life-course patterns among women at different career stages.
Younger mothers are pulled out of the job market by childcare demands. Older women encounter age bias and health limits. These women are not “choosing to drop out” from the workforce. They are responding to structural pressures at different stages of life.
We see similar patterns among men, as well.
A significant group of young men face intersecting disadvantages early in adulthood. Weak educational foundations combined with health issues limit their attachment to stable work. Older adults — particularly those with low education and long-term health conditions — face persistent barriers.
Finding policies that work
Activation policies are employment policies designed to “activate” people who are out of work by pushing or encouraging them to search for jobs more actively. The underlying idea is that the problem sits with the individual: search harder. Try more. Be more motivated.
Our findings suggest the barriers often sit elsewhere.
Older workers need health support and age-inclusive hiring. Care-burdened mothers need affordable childcare and genuine flexibility.
Young men with low education need strong training and stable entry pathways. Highly educated, married women need workplaces that offer flexibility and don’t penalise career breaks.
Discouraged workers are not a single silent mass. They represent many different stories of stalled potential.
If we want a stronger, fairer labour market, we need to see them clearly – and design policies that respond to the real reasons they stopped searching in the first place.
Authors: Sora Lee, Lecturer in Ageing and End of Life, La Trobe University
Daily Bulletin
