Question

2. The table below relates to the labor force classification of a particular country. Use the information to answer the questions that follows. Full-time employed 56 million Part-time employed 22 million Unemployed 12 million Not in the Labor Force 30 million Calculate the following: a. Labor Force b. Adult Population c. Unemployment rate d. Labor-Force participation rate e. If some of those actively looking for a job apparently give-up and become “discourage workers’. All else being the same, how would that affect unemployment rate and labor-force participation rate? Will they increase, decrease or stay the same? f. If some of the part-time workers get a full-time position, all else equal, how would that affect unemployment rate? Will it increase, decrease or stay the same? g. Suppose there were a fraction of this population who are college students that only goes to school full-time but recently graduated and are all recently hired. All else being the same, how would that affect unemployment rate and labor-force participation rate? Will they increase, decrease or stay the same? (Hint: Assume all these people aged at least 16 years old even by the time they were going to college)

Answer 1

Question 2

(a)

Calculate the Labor force -

Labor force = Full-time employed + Part-time employed + Unemployed

Labor force = 56 million + 22 million + 12 million

Labor force = 90 million

The labor force is 90 million.

(b)

Calculate the Adult Population -

Adult population = Labor force + Not in the labor force

Adult population = 90 million + 30 million

Adult population = 120 million

The adult population is 120 million.

(c)

Calculate the unemployment rate -

Unemployment rate = (Unemployed/Labor force) * 100

Unemployment rate = (12 million/90 million) * 100

Unemployment rate = 13.33%

The unemployment rate is 13.33 percent.

(d)

Calculate the labor-force participation rate -

Labor force participation rate = (Labor force/Adult population) * 100

Labor force participation rate = (90 million/120 million) * 100

Labor force participation rate = 75%

The labor force participation rate is 75 percent.