Question

suppose the number of employed people in an economic is 312,545372. the unemployment rare in this economic is 7.4 percent or 074 and the labor force participation rate is 80 percent or 80. what is the size of the labor force. how many people are unemployed. what is the size of the working age population.

Answer 1

Solution:

Labor force is defined as the number of people who are unemployed and employed and who are 16 years old or above it.

Labor-force participation rate is the ratio of total labor force and total adult population. Unemployment rate measures the number of people unemployed as a percent of the total workforce

It is given that the there are 312,545 372 people are employed, 7.4% is the rate of unemployment and 80% is the rate of labor force participation.
a )
Here. size of labor force is to determine using the given figures. In order to do this. first calculate the employment rate using the unemployment rate and then calculate the labor force as follows:
Since, unemployment rate is 7.4% so the employment rate will be 92 6% [-= 100% — 7.4%] Now the labor is calculated as follows.
  $employment rate = \frac{employed people }{labor force} * 100$

$92.6 = \frac{312,545,372 }{labor force} * 100$

$labor force= \frac{312,545,372 }{92.6} * 100$

$= 3,375,220 * 100$

  $= 337,522,000$

Hence the size of labor force is $337,522,000$

b)

Here, number of unemployed is calculated as follows:

= labor force - employed people

= 337,522,000 - 312,545,372

= 24,976,628

Hence the number of unemployed people is 24,976,628

c)

Here, size of working population is calculated using the labor force participation rate as follows:

  $labor force participation rate = \frac{labor force}{population}$

  $0.80 = \frac{337,522,000}{population}$

  $population= \frac{337,522,000}{0.80}$

  $=421,902,500$