0:00:00.140,0:00:03.900
♪ [music] ♪

0:00:13.572,0:00:15.393
- [Narrator] What is[br]a discouraged worker?

0:00:15.711,0:00:18.746
This is a term economists use[br]to describe a jobless person

0:00:18.746,0:00:22.400
who would like to have a job[br]but has given up looking for one.

0:00:22.921,0:00:25.110
But why not just call these people[br]"unemployed"?

0:00:25.400,0:00:28.755
Well, the Bureau[br]of Labor Statistics, or BLS,

0:00:28.755,0:00:31.715
actually defines and measures[br]six unemployment rates,

0:00:31.715,0:00:33.928
called U1 through U6.

0:00:34.658,0:00:38.562
U1 through U3, the more stringent[br]definitions of unemployment,

0:00:38.562,0:00:40.851
do not include discouraged workers.

0:00:41.170,0:00:45.171
However, U4 through U6,[br]the less stringent definitions,

0:00:45.171,0:00:47.530
do include[br]some discouraged workers --

0:00:47.530,0:00:49.030
people who say they want a job,

0:00:49.030,0:00:51.591
and although they haven't looked[br]for work in the past four weeks,

0:00:51.593,0:00:53.350
they have looked in the past year.

0:00:54.166,0:00:56.946
So the BLS does track and count[br]these discouraged workers

0:00:56.946,0:01:00.610
as unemployed, but only in certain[br]unemployment measures --

0:01:00.618,0:01:03.288
U4, U5 and U6.

0:01:04.035,0:01:06.566
Now, U3 is the official[br]unemployment rate

0:01:06.567,0:01:07.986
that we usually see in the news,

0:01:07.986,0:01:10.315
and we define this as those[br]who are unemployed

0:01:10.315,0:01:12.863
and have looked for work[br]in the past four weeks.

0:01:13.107,0:01:14.995
But we don't see[br]discouraged workers --

0:01:14.995,0:01:16.471
those who have given up looking.

0:01:16.952,0:01:18.377
It's only at U4

0:01:18.377,0:01:20.845
that some discouraged workers[br]start to be included.

0:01:21.524,0:01:23.072
Let's take a closer look.

0:01:23.361,0:01:25.507
Including discouraged workers in U4

0:01:25.507,0:01:29.475
increases the unemployment rate slightly[br]from the official definition of U3,

0:01:29.679,0:01:32.333
but the two rates[br]move together very closely.

0:01:32.891,0:01:34.476
As a general rule,

0:01:34.476,0:01:37.136
most of the alternative definitions[br]of unemployment

0:01:37.136,0:01:38.881
track each other quite closely.

0:01:39.239,0:01:41.381
So if things are getting worse[br]by one measure,

0:01:41.386,0:01:43.845
they're usually getting worse[br]by all measures.

0:01:44.280,0:01:46.823
The same thing is true[br]when things are getting better.

0:01:47.882,0:01:49.094
♪ [music] ♪

0:01:49.094,0:01:52.096
To learn more about different types[br]of unemployment, click here.

0:01:52.593,0:01:55.250
Or, test your knowledge[br]on the discouraged worker, here.

0:01:55.521,0:01:58.656
♪ [music] ♪

0:01:58.846,0:01:59.907
Still here?

0:01:59.907,0:02:03.107
Check out Marginal Revolution[br]University's other popular videos.

0:02:03.346,0:02:06.996
♪ [music] ♪