Question

Please answer a and b.

16. The town of Villageton has 500 residents, of which 300 are employed, 30 are not work- ing but actively seeking work, 80 are children in school, 40 are retirees, 30 are full-time college students, and 20 are institutionalized. a. Calculate the unemployment rate in Villageton. b. Suppose that 10 of the 30 college students graduate and enter the labor force actively seeking work, but only 5 find a job. How does this change the unemployment rate in Villageton?

Answer 1

Given,

The the town of Villageton:

Number of employed persons = 300

Number of unemployed persons = 30 (who are not working but actively seeking work)

Note that children, retirees, full-time students and institutionalized persons are not counted under labor force (i.e., in the employed and unemployed data)

Labor force = Number of Employed + Number of unemployed = 300 + 30 = 330

a. Unemployment rate = Number of unemployed/Labor force x 100 = 30/330 x 100 = 9.09%

b. If 10 out of 30 college students graduate and enter labor force out of which only 5 find a job, then

Labor force = 330 + 10 = 340

Number of employed = 300 + 5 = 305

Number of unemployed = 30 + 5 = 35

Unemployment rate = Number of unemployed/Labor force x 100 = 35/340 x 100 = 10.29%