1. Measuring employment, unemployment, and labor force participation Consider a
ID: 1118316 • Letter: 1
Question
1. Measuring employment, unemployment, and labor force participation
Consider a small economy composed of six people: Shen, Valerie, Antonio, Caroline, Frances, and Dmitri. Each person's employment status is described in the following table.
Based on the criteria used by the Bureau of Labor Statistics (BLS), identify each person’s status as employed, unemployed, “not in the labor force” (if not in the civilian labor force but still part of the adult population), or “not in the adult population” if not in the civilian adult population.
Complete the right half of the following equation to reflect the labor force participation rate reported by the BLS.
According to this formula, what is the labor force participation rate of this economy of six people?
20%
60%
66.67%
200%
Complete the right half of the following equation to reflect the unemployment rate reported by the BLS.
According to this formula, what is the unemployment rate of this economy of six people?
20%
60%
66.67%
200%
Person Status Shen is a 22-year-old professional tennis player. When he's not competing, he works as a coach at a local tennis club. Employed Valerie is a 28-year-old professional basketball player. She finished her last season as a player 3 weeks ago and is currently interviewing for a coaching position. Unemployed Antonio is a 44-year-old accountant who has been out of work for almost a year. He became so discouraged that he gave up on his job search a couple of months ago. Not in the labor force Frances is a 26-year-old who lost her job as a copy editor for a local newspaper. She has spent the past few weeks out of work and interviewing for other editing jobs. She is thinking about going back to grad school if her job search doesn't succeed after a few more weeks. Unemployed Dmitri is a 17-year-old who just graduated from high school. He is taking it easy this summer, relaxing by the pool with his friends and family, and volunteering part-time at the local nursing home. Employed Caroline is a 13-year-old student at Southside Middle School. She babysits her younger sister and does other chores, so her parents give her an allowance of $20 per week. Not in the adult populationExplanation / Answer
(1) Dmitri is doing volunteering work that is not a job. He is not looking for a job either, therefore he is not in labor force.
(2) 60%
Labor force participation rate = Number in labor force / Working age population
= 3 (Shen, Valerie, Frances) / 5 (Everyone except Caroline) = 0.6 = 60%
(3) 66.67%
Unemployment rate = Number unemployed / Labor force
= 2 (Valerie, Frances) / 3 (Valerie, Frances, Shen) = 0.6667 = 66.67%
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