How would the measured levels and changes in the unemployment rate during a recession be affected if discouraged workers were counted as unemployed? Explain. How does the length of the recession affect your answers?
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If the discouraged workers are counted as unemployed. Then the measured unemployment rate will be higher. Because it would add another group of people who weren’t counted before.
And during a recession more workers get discouraged, especially during a longer recession. Because it’s harder to find work during a recession. And the longer the recession lasts, the more workers who can’t find jobs for a long time are likely to get discouraged.
Which means that counting discouraged workers during a long recession will increase the measured unemployment rate more than during a short recession.