Question

2. Give a definition of: a. b. c. Unemployment rate. [2p] Employment rate. [2p] Can a country have both a low unemployment rate and a low employment rate? Explain. [2p]

Answer 1

1) The unemployment rate can be defined as the percentage of unemployed individuals in the total labor force. Workers are categorised unemployed when they are not working currently, despite the fact that they are able and willing to do so. The total labor force is inclusive of both employed as well as unemployed people within an economy.

2) The employment rate can be defined as the percentage of employed individuals in the total labor force. It measure of the extent to which available labour resources (individuals available to work) are being utilized.

3) Yes, a country have a low unemployment rate and low employment rate. The employment-to-population ratio does not account for people who are over or under the working age however are still working, such as child actors or babysitters. These workers may be counted in the employed part of the ratio however are excluded in the total number of people of working age, thus it inaccurately increases the ratio. Moreover the number of hours worked are not taken into account, and consequently the ratio does not discriminate between part-time and full-time workers. As a result a country have a low unemployment rate and low employment rate.