Question

Q4. Suppose the labour for participation rates in three consecutive years are 65.6%, 66.0% and 66.9%, and the unemployment rates are 7.5%, 6.8%, and 7.3%. Calculate the corresponding employment rates for the three years.

Answer 1

Employment rate for any year = employment / working age population

Now we know that LFPR = Labor force / working age population and

employment = labor force - unemployment

Now we have Employed workers rate for three years are 100 - 7.5, 100 - 6.8, 100 - 7.3 or 92.5%, 93.2% and 92.7%

Employment rate = % of workers employed out of labor force * LFPR

Employment rates are 92.5%*65.6%, 93.2%*66.0%, 92.7%*66.9% or 60.68%, 61.51%, and 62.02%

Hence, employment rates for the three years are 60.68%, 61.51%, and 62.02%