LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Chapter 12, Problem 3P
To determine
Explain the total number of weeks of
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The total adult, working-age population in January 2017 was 254.1 million.
Out of this total population, 152.1 million were classified as employed, and 7.6 million were classified as unemployed.
The remaining 94.4 million were classified as out of the labor force.
As you will learn, however, this seemingly simple chart does not tell the whole story.
Discuss what the unemployment rate is telling us. Explain what the unemployment rate does not tell us regarding the economy, or the health of the economy. What might we miss if we try to judge the economy based only on the unemployment rate?
Not all groups in our society experience equal opportunity to work. The purpose of this discussion board is to allow you to research and explain the causes of disparity between current total U.S. unemployment and the unemployment rate for a demographic of your choice. Do not just list unemployment rates. Explain what causes the rates for the demographic of your choice to be different from the National average.
Visit the Bureau of Labor Statistics website. What is the current national unemployment rate? Find the unemployment rate for the demographic group that best fits a description of you (for example, based on age, sex, and race) or choose a demographic group of interest. Is the rate for that demographic higher or lower than the national average? What are some reasons for the differences? Do some research in support of what you present. What factors contribute to the differences?
Covid-19 caveat: The Pandemic did not necessarily impact all demographics in the same way.
Suppose a country surveys households and finds that 135 million people can be classified as being employed and 7
million people can be classified as being unemployed. The unemployed are people who do not have jobs but are actively
looking for work.
Given this information, what do we know about the unemployment rate for this country?
The unemployment rate for this country is %. (Round your response to two decimal places.)
Suppose this country has a natural rate of unemployment equal to 4.43%.
What do we know about the size of the output gap, Y - Yn, in this country?
The output gap in this country is million units. (Round your response to two decimal places and use a negative sign if
necessary.)
Now suppose this country has an a = 0.75 ().
What do we know about the change in iflation, a -
T( – 1), In this country between the previous year and this year?
The change in inflation is percent. (Round your response to two decimal places and use a negative sign if necessary.)
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- Suppose the number of employed people in Pakistan is 20.5 million. The unemployment rate in this economy is 8.8 percent, and the labor force participation rate is 65 percent. What is the size of the labor force and working-age population? How many people are unemployed? Explain and analyze different government policies which affect the unemployment rate in Pakistan? ( Maximum 200 words). Before June 2020, the labor market in Pakistan was at equilibrium with an equilibrium wage (WE) of Rs. 15,000 and equilibrium quantity of labor (LE) 10 million. In the last week of June, 2020, government of Pakistan imposed a minimum wage Act raising the minimum wage to Rs. 20,000. Using a graph, explain the effect of imposition of minimum wage on unemployment in labor market of Pakistan .arrow_forwardA country with a civilian (work-eligible) population of 90,000 (all over age 16) has 70,000 employed and 10,000 unemployed persons. Of the unemployed, 5,000 are frictionally unemployed and another 3,000 are structurally unemployed. On the basis of these data, answer the following questions. What is the natural rate of unemployment for this country? Is this economy in recession or expansion? Explain.arrow_forwardA country with a population of eight million adults has five million employed, 500,000 unemployed, and the rest of the adult population is out of the labor force. What’s the unemployment rate? What share of population is in the labor force? (Show your work in your answer.)arrow_forward
- Unemployment is an important economic indicator for the health of an economy. No one wants to be unemployed, especially for a longer period of time. Fill in the missing values in the table of data collected in the household survey for November 2021. The working-age population, employment, unemployment, and labor force are measured in thousands. Show your work. 2020 Household Survey Working-age population 235,900 Employment Unemployment Unemployment rate 9.4% Labor force Labor force participation rate 65.5%arrow_forwardA country with a civilian (work-eligible) population of 90,000 (all over age 16) has 70,000 employed and 10,000 unemployed persons. Of the unemployed, 5,000 are frictionally unemployed and another 3,000 are structurally unemployed. On the basis of these data, answer the following questions. What is the size of the labor force? What is the unemployment rate?arrow_forwardIn March, 2006 the labor department of the country of Jobland determined that the size of the labor force was 100 million out of which 96 million were employed. In May 2006, the labor department determined that 1.0 million people became "discouraged workers" in April. Assuming that no new jobs were created between March and April, calculate the unemployment rate for March and April. Jobland unemployment rate in March = percent. (Enter your response rounded to one decimal place.) Jobland unemployment rate in April = percent. (Enter your response rounded to one decimal place.)arrow_forward
- Consider an economy that initially has a labor force of 2,000 workers. Of these workers, 1,900 are employed. The economy enters a recession. The number of employed workers falls by 4%. In addition, 0.2% of the labor force becomes discouraged at the prospect of finding a job and leaves the labor force. Show your calculation for the following. a. How many workers are unemployed before the recession? What is the unemployment rate before the recession? b. After the recession begins, what is the size of the labor force? How many workers are employed? How many workers are unemployed? What is the unemployment rate? c. Suppose that total output falls by 8% in the recession, what is the value of the Okun's law coefficient relating the loss of output to the increase in unemployment?arrow_forwardAccording the U.S. labor statistics, roughly 5.8 million people were unemployed in 2006. Of these, 2.1 million were unemployed for less than 5 weeks, 1.7 million were unemployed for 5 to 14 weeks, 900,000 were unemployed for 15 to 26 weeks, and 1.1 million were unemployed for 27 or more weeks. Assume that the average spell of unemployment is 2.5 weeks for anyone unemployed for less than 5 weeks. Similarly, assume the average spell is 10 weeks, 20 weeks, and 35 weeks for the remaining categories. How many weeks did the average unemployed worker remain unemployed? Write your answer in millions of week (i.e. if your answer is 30,500,000 weeks, input 30.5 as the answer)arrow_forwardIn an economy, the working-age population is 400 million. Of this total, 300 million workers are employed. 16 million workers are unemployed. 64 million workers are not available for work (homemakers, full-time students, etc.). 12 million workers are available for work but are discouraged and thus are not seeking work. 8 million workers are available for work but are not currently seeking work due to transportation or childcare problems. The unemployment rate in this economy is%. (Round your answer to one decimal place) wwwarrow_forward
- The structural unemployment rate is 2.89% and the frictional unemployment rate is 2.69%. If current cyclical unemployment rate is 8.00%, what is the current natural unemployment rate? Write your answer as a percentage and round at two (2) decimals. Do not write the percentage (%) sign, and use a minus (-) in front of a decrease.arrow_forwardThe attached chart (Quits: Total Nonfarm) shows the quit rate (the number of who quit their job during the entire month as a percentage of total employment. What happens to the quit rate during the recession of 2007-08? Why? What happened to the unemployment rate during the recession of 2007-08? Use your answers to explain why the unemployment rate will never fall to zero and a certain amount of unemployment is desirable.arrow_forwardConsider two hypothetical countries. In Country A, 18 percent of the labour force is unemployed for half the year and employed for the other half; the remaining 82 percent of the labour force is never unemployed. In Country B, 100 percent of the labour force is unemployed for 9 percent of the year and employed for the other 91 percent of the year. Note that both countries have an overall unemployment rate of 9 percent. Which of these countries seems to have the more serious unemployment problem, and why? O A. Country A because unemployment is unevenly distributed there. B. Country A because the unemployment is most likely cyclical. O C. Country B because unemployment is unevenly distributed there. O D. Country B because people are unemployed for the longer period of time. E. The answer is ambiguous. Both countries have very unevenly distributed unemployment.arrow_forward
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