Question

An economy has 365 people divided among the following groups: 60 have full-time jobs, 10 have one part-time job, 10 have two part-time jobs, 25 would like to work and are looking for jobs, 35 would like to work but are so discouraged they have given up looking, 40 are running their own businesses, 15 are retired, and 170 are small children.

Required:
a. Calculate the labor force and the labor-force participation rate.
b. Calculate the number of unemployed and the unemployment rate.
c. Calculate total employment in two ways: as measured by the household survey and as measured by the establishment survey.

Answer 1

Labor force= 145

Labor-force participation rate= 80%

Number of unemployed= 25

Unemployment rate= 17.24%

Total employment by household survey= 80

Total employment by establishment survey= 90

Step-by-step explanation:

According to the Bureau of Labor Statistics,

1. Labor force is the total number of employed and unemployed persons

= 365-170-35-15

=145

2. Labor Force Participation rate= Labor Force/Civilian non-institutionalized poulation

= 145/180*100

= 80%

3. The unemployed are those above 16years who do not have a job but are willing to work and have been actively searching for jobs.

=25 From the information given.

4. Unemployment rate= unemployed/labor force*100

= 25/145*100

=17.24%

5. Total employment by household survey counts one person with two jobs once while the establishment survey counts the two jobs. So, since 10 people have two part-time jobs, the establishment survey counts them twice.

Therefore, household survey= 60+10+10

=80

Establishment survey= 60+10+20

=90