Chapter 7.3, Problem 69E

To determine

Tocalculate:The unemployment rate for people with each level of education. Also, to determine how the unemployment rate changes with education.

Answer to Problem 69E

The required unemployment rates for each level are 0.0852, 0.0523, 0.0425 and 0.0272.

Explanation of Solution

Given information:

The data:

Highest education	Total population	In labor force	Employed
Didn’t finish high school	27,669	12,470	11,408
High school but no college	59,860	37,834	35,857
Less than bachelor’s degree	47,556	34,439	32,977
College graduate	51,582	40,390	39,293

Calculation:

To find the unemployment rate for each level, divide the difference between ‘in labor force’ and ‘employed’ by the ‘in labor force’ from the data.

Unemployment rate for people who didn’t finish high school $\begin{array}{c}=\frac{12470-11408}{12470}\\ =\frac{1062}{12470}\\ \approx 0.0852\end{array}$

Unemployment rate for people who did high school but no college $\begin{array}{c}=\frac{37834-35857}{37834}\\ =\frac{1977}{37834}\\ \approx 0.0523\end{array}$

Unemployment rate for people which have less than bachelor’s degree $\begin{array}{c}=\frac{34439-32977}{34439}\\ =\frac{1462}{34439}\\ \approx 0.0425\end{array}$

Unemployment rate of people which are college graduates $\begin{array}{c}=\frac{40390-39293}{40390}\\ =\frac{1097}{40390}\\ \approx 0.0272\end{array}$

It is seen that if highest education is higher, then the unemployment rate becomes lower.

Hence, the required unemployment rates for each level are 0.0852, 0.0523, 0.0425 and 0.0272.