a.Calculate the employment population ratio, the labor force participation rate,

Question

a.Calculate the employment population ratio, the labor force participation rate, the employment rate and the unemployment rate in the year 2017.

b. A broader measure of unemployment, called the under-employment rate, also includes as unemployed discouraged workers and those who work part-time for economic reasons. Calculate the under-employment rate in the year 2017.

c. The natural rate of unemployment in 2017 was 4.74%, calculate the cyclical unemployment rate

United States (in millions) National Population 2017 325.7 70.6 255.1 94.8 1.6 160.3 153.3 5.0 7.0 Children+ active military+institutionalized persons Potential workers Not in Labor force Discouraged Labor force lotal Emploved Derso113 Employed Partime for Economic Reasons Unemploved persons

Explanation / Answer

Ans:

a)

1) employment population ratio = employment / population

= 153.3 millions / 325.7 millions

= 0.4706 or 47.06%

2) Labor force participation ratio = Labor force / Non institutionalized civil population.

Non institutionalized civil population = 325.7 millions - 70.6 millions

= 255.1 millions

Labor force participation ratio = 160.3 millions / 255.1 millions

= 0.6284 or 62.84%

3) employment rate = employed / labor force

= 153.3 / 160.3

= 0.9563 or 95.63%

4) unemployment rate = unemployed / labor force

= 7 / 160.3   

= 0.0436 or 4.36%

b) Underemployment rate = (7 million+ 1.6 million + 5 million) / (160.3 million+ 1.6 million + 5 million)

= 13.6 million / 166.9 million

= 0.0815 or 8.15%

c) cyclical unemployment rate = under employment rate - natural rate of unemployment

= 8.15% - 4.74%

= 3.41%

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