Stochastic modeling of labor supply and discouraged worker behavior

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Authors: John K. Dagsvik, Tom Kornstad, Terje Skjerpen
Cited by: 0
References: 25

Abstract

Discouraged workers are those who have given up searching for work because of the (perceived) low chances of obtaining it. In this paper we develop a stochastic structural econometric framework for analyzing discouraged worker behavior based on the theory of job search and the notion of probabilistic rationality and risky choice. Subsequently, we conduct an empirical analysis of immigrant women from non-Western countries and women born in Norway, using microdata on labor force participation and unemployment. We find that the discouraged worker effect is particularly high among immigrant women with low wage rates and many children.

Fields of Study & Subjects

Advanced Queuing Theory Analysis

Publication details

Journal / source
Journal of Economic Behavior & Organization
Volume
249
Pages
107682–107682
Publication date
17 August 2026
Language
EN