Question

what is meant by the term "marginally attached to the labor force (workers)"?

Answer 1

Marginally attached workers are considered a subset of individuals who are not in the labor force. Although individuals not in the labor force are not currently looking for work, marginally attached individuals have looked for work in the last 12 months but not the previous four weeks.Moreover, these individuals want a job and would be able to accept a job were oneavailable.Similar to the distinction between part time for economic reasons and part time for noneconomic reasons, the marginally attached have two core subgroups, including discouraged workers.Discouraged workers are specifically those marginally attached workers who provide the following reasons why they have not looked for work recently: they do not believe work is available, they could not find work, they believe they lack the necessary school or training, they think employers find them too young or too old, or they have faced other forms of discrimination. The main question used to determine whether an individual is discouraged is PEDWRSN, which asks the specific reason why the individual was not looking for work the previous four weeks.
Individuals who meet the definition of marginally attached but are not considered discouraged workers provide different reasons for not looking for work in the last four weeks, though they are still willing to accept work. Among these reasons are illness, school, family responsibilities, transportation issues, or another, not provided, reason. As is the case with discouraged workers, the variable PEDWRSN provides the responses that would sort an individual into this category.a marginally-attached worker if they have not been actively seeking employment for one of two reasons:they believe their efforts would be futile or other reasons. Those who satisfy the first criterion areofficially considered discouraged workers, while those who satisfy the second are generally termed other marginally-attached workers.

Marginally-attached workers are excluded from the estimation of the "official" unemployment rate. Because marginally-attached workers are NOT actively seeking employment, the Bureau of Labor Statistics (BLS) relegates them to the not in the labor force category, meaning they are not officially considered to be unemployed persons nor in the civilian labor force. Excluding marginally-attached workers means the official unemployment rate tends to understate the severity of unemployed labor resources in the economy. However, the BLS does provide an alternative measure of unemployment (officially labeled U5) that includes marginally-attached workers.Including all marginally-attached workers to the unemployment rate calculation adds about a full percentage point (such as from 5.0% to 6.0%). However, the number of marginally-attached workers, and their impact on the unemployment rate, changes over the course of the business cycle.

During business-cycle expansions, when the economy is growing, jobs are aplenty, and finding employment is relatively easy, workers are less likely to remain away from the labor force. As such, their inclusion in the unemployment rate adds something less than a full percentage point.During business-cycle contractions, when the economy is shrinking, jobs are few and far between, and finding employment is relatively hard, workers are more likely to remain marginally-attached to the labor force. As such, including marginally-attached workers to the official unemployment rate calculation would add more than a percentage points.