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Persons Outside the Labor Force Who Want A Persons Who Want a Job Persons Who Want a Job Persons outside the labor force who want a job Persons enter or leave the labor force in response to a myriad of changing personal or economic conditions; their decisions often do not seem to be closely linked to their stated desire or availability for work a year earlier lthough labor economists tend to focus measures were developed to more accurately and Monica D. Castillo on the activities and characteristics of objectively identify those persons who might be Apersons in the labor force, there has been considered to be most closely linked to the labor continued, if somewhat less visible, interest in force as determined by factors such as their de- the possible links to the job market of persons sire to work, availability for work, and recent job outside the labor force who want work but are search activity. In addition, the analysis takes a not currently seeking a job. Data from the Cur- look at whether specific groups of nonpartici- rent Population Survey (CPS) show that an aver- pants—particularly those defined as “discour- age of 4.9 million nonparticipants reported that aged workers”—in fact show a greater attach- they wanted a job in 1997, representing about 7.4 ment to the labor force than had been shown un- percent of all persons outside the labor force. der the prior definitions. Also considered is the Persons making up this group—particularly “dis- degree to which subsequent labor force partici- couraged workers”—are of interest to labor mar- pation differs among the various subcategories ket analysts and policymakers because they, like of persons outside the labor force who said they the unemployed, represent unused human re- wanted to work, and how the experience of such sources in our economy. Moreover, information persons compares with that of persons who had on the size, profile, and extent of subsequent la- been unemployed. In the concluding sections of bor force attachment of these nonparticipants the article, the influence of certain demographic, who want a job is important to understand the work history, and intention-to-work characteris- nature of the total labor supply and to provide a tics is studied to determine the extent to which complete measure of the slack or tightness of the these factors are predictors of subsequent labor labor market. market activity. This article discusses the development of not- in-the-labor-force concepts used in the CPS, il- lustrating how the definitions have changed over Not-in-the-labor-force concepts time to reflect evolving notions about persons Labor economists first became interested in per- outside the labor force and their relationship to sons outside the labor force who wanted a job as the labor force. Using classifications of nonpar- a potential source of labor in the post-World War ticipants based on definitions that were imple- II period.1 During the Great Depression, the Monica D. Castillo is an mented as part of the 1994 redesign of the CPS, economy had included a vast number of unem- economist formerly this article also examines the extent to which with the Office of ployed with few prospects of finding work. Employment and persons who had been outside the labor force and Among the new post-war realities, revealed by Unemployment indicated that they wanted a job in 1994 became new data on the labor force, was the fact that Statistics, Bureau of attached to the labor force a year later. The new millions of people moved into and out of the la- Labor Statistics. 34 Monthly Labor Review July 1998 bor force each year not only for personal reasons but because tions on the characteristics of persons not in the labor force. of changes in labor demand. Thus, the new definition of discouraged workers incorpo- The first concepts and definitions to account for those per- rated two changes. First, a question to determine whether a sons outside the labor force who wanted a job were incorpo- person had searched for a job within the prior 12 months was rated into the CPS in January 1967. These measures were in- added. Second, a direct question on availability to take a job troduced as a result of recommendations by the President’s was added that replaced the inferred measure of availability Committee to Appraise Employment and Unemployment Sta- used with the former definition. Under the new question de- tistics (more commonly known as the Gordon Committee), sign, individuals who are not searching for work but who want which, in 1962, recognized the need to collect more detailed a job and are available for work are asked the main reason information in the CPS on so-called “discouraged workers”— why they are not looking for work. (In the former scheme, that is, persons outside the labor force who were not currently individuals could provide any number of reasons for not seek- looking for a job because they believed their job search would ing work. A “nondiscouraged” reason took precedence over a be in vain. Some analysts referred to such persons as the “hid- “discouraged” reason in the classification scheme.) den unemployed.” An additional not-in-the-labor-force concept was created Data on such workers, based on a consistent set of defini- as part of the design of the new questions. It relates to persons tions, were collected in the CPS from 1967 through 1993.2 who are “marginally attached” to the labor force. This is a Persons who were not in the labor force—that is, who were broader concept than “discouraged workers” in that it includes not working at all during the survey reference week and who the requirements for job desire, availability, and job search in had not looked for work during the prior 4-week period— the past year, but places no restrictions on the reasons for not were asked if they wanted a job “now,” either full or part time. looking for work. Thus, persons who meet these conditions Those with an affirmative answer were asked the reason they and cite family responsibilities or transportation problems as were not seeking a job. Persons classified as “discouraged reasons for not conducting a job search, for example, would workers” were those who responded that they did not think be included among the marginally attached. they could find a job, either for a job market-related reason, The newly defined discouraged workers are a subset of the such as their belief that work was not available or that they marginally attached group. Despite the additional job search could not find any work, or for certain personal reasons, such and availability requirements, the new definition of discour- as a perception that they were too young or too old, that they aged workers maintains the same reasons for not conducting lacked education or training, or that they had some other per- a job search as provided under the former definition, namely, sonal handicap.3 that such persons believe no jobs are available for them or Criticisms of the definition of discouraged workers later that there are none for which they could qualify. More spe- surfaced, however, particularly during the 1970s. In 1979, the cifically, such persons respond that they are not currently look- National Commission on Employment and Unemployment ing for work for one of the following reasons: they believe Statistics (also known as the Levitan Commission) formal- there are no jobs available for them; they could not find work; ized these criticisms, noting that the definition of discouraged they lack necessary schooling, skills, or experience; or they workers was (1) too subjective, because the measure was perceive some type of discrimination in the workplace. With based primarily on a stated “desire” for a job, without speci- the implementation of the additional job search and availabil- fying the terms and conditions of work,4 and (2) too arbitrary, ity requirements in 1994, the number of discouraged workers because availability to take a job was inferred from responses fell by roughly half. to the question on reasons for not currently looking for a job Within the marginally attached group, persons who give rather than determined directly.5 reasons other than discouragement for not conducting a job The Levitan Commission recommended using a new mea- search—referred to as “other marginally attached” persons— surement that would be based on clear evidence of prior job constitute almost three-fourths of the total group. Their rea- search and current desire and availability for a job. Their rec- sons for not looking for a job include child care problems, ommendation was accepted by the Secretary of Labor 2 family responsibilities, going to school or training, ill health years later6 but could not be implemented at that time be- or disability, transportation problems, or other reasons. cause there was no funding to test the impact of a changed definition and survey questions on other measures, such as the overall unemployment rate. An opportunity for testing Past studies and theoretical concepts arose in the late 1980s as the Bureau of Labor Statistics, in Past studies of persons not in the labor force had focused on a collaboration with the Bureau of the Census, began a major group referred to as the “hidden unemployed.” This group program to modernize the CPS. An entirely new questionnaire was generally defined by researchers as those persons who was developed and tested, including a new series of ques- would like to work but are too discouraged over employment Monthly Labor Review July 1998 35 Persons Who Want a Job prospects to search for a job.7 It was assumed that many of groups or than discouraged workers as classified under the these hidden unemployed would be labor force participants in former definition.
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