Hidden in the Labour Market: An Intersectional Latent Class Analysis of Discouraged Workers in Australia

ABSTRACT This study employs an intersectionality‐informed latent class analysis (LCA) to examine the hidden diversity of discouraged workers in Australia. Drawing on nationally representative data from the Household, Income and Labour Dynamics in Australia Survey, we identified six empirically distinct subgroups defined by intersecting demographic and structural characteristics. Class 1 consisted of older educated married men with moderate health issues, while Class 2 captured older, low‐educated workers with chronic health conditions. Class 3 included older educated singles facing poor health and financial risk, and Class 4 represented young low‐educated single men with weak labour market attachment. Two gendered trajectories also emerged: Class 5 comprised care‐burdened, low‐educated mothers experiencing financial strain, while Class 6 consisted of educated married women whose discouragement patterns were consistent with gendered labour‐market constraints, despite strong health and educational profiles. Robustness checks using SF‐36 health functioning and life satisfaction measures confirmed clear gradients in wellbeing across classes, reinforcing the validity of the six‐class typology. The results demonstrate that discouraged workers cannot be understood as a uniform group but reflect diverse pathways shaped by overlapping disadvantages. Recognising this heterogeneity highlights the need for differentiated policy approaches, including childcare supports, age‐inclusive employment, and measures to dismantle gendered barriers to participation.