This paper seeks to identify the extent to which family and social factors either enhance or detract from Indigenous economic participation. Defining 'discouraged workers' as those who want to work but are not actively looking for work, the authors note that Indigenous people are far more likely than other Australians to be discouraged workers. The article reports on the results of analysis of data from the 1994 National Aboriginal and Torres Strait Islander Survey (NATSIS) which provides a unique opportunity to examine the processes underlying Indigenous labour force status. The research extends the range of factors examined in studies of Indigenous labour supply to include cultural and social environmental factors, and focuses on what leads to Indigenous people becoming discouraged workers. The importance of family, cultural and social environmental factors in determining the labour force outcomes of Indigenous people is highlighted, and implications discussed.