The Discouraged Worker Effect during the Covid-19 Pandemic in Türkiye

Abstract

The Covid-19 pandemic has negatively affected labour markets, among other aspects of life. This study examines the impact of the discouraged worker effect during the pandemic, focusing on the Turkish labour market from 2018 to 2021. Although few studies exist on this topic, they rely on labour force participation rates, whereas our dataset includes direct questions and data specifically related to the discouraged worker effect, allowing for a microeconomic analysis. Probit regression results show that the discouraged worker effect was stronger during the pandemic, with job seekers being 1.6% more likely to become discouraged than before. Higher education levels generally reduce this likelihood, both before and during the pandemic. While age negatively correlates with discouragement, this effect diminishes with increasing age. Single women were more adversely affected than single men and married women than married men. Higher unemployment rates increase discouragement, as expected, while an increase in the unemployment rate has a greater effect on individuals during the pandemic period. Findings suggest that the pandemic had a disproportionate impact on certain individuals, particularly with respect to education level and gender, while Türkiye's societal structure may help explain the observed gender-based differences.