Worked Out Problems
Unemployment and Labor Force Participation Rates
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Material from this presentation can be found in:
Chapter 10 (Macro)
Chapter 24 (Economics)
Slides Created By
Dr. John Dawson
Modern Principles of Economics By Cowen/Tabarrok
Worked Out Problems
Unemployment and Labor Force Participation Rates
To answer Questions 1-5 below, use the following actual data, in thousands, for the U.S. economy as
of December, 2009.
In thousands:
Total (age 16+)
Women (age 16+)
Men (age 16+)
Employed
137,792
65,293
72,499
Unemployed
15,267
6,312
8,955
Civilian, Non-Institutionalized
Population
236,925
122,197
114,728
1. What is the total (men plus women) labor force in the U.S. economy as of December, 2009?
2. What is the total unemployment rate?
3. What is the total labor force participation rate?
4. How does the unemployment rate among men and women differ?
5. How does the labor force participation rate among men and women differ?
Answers
Worked Out Problems
Unemployment and Labor Force Participation Rates
ANSWERS:
1.
The labor force is made up of all workers, employed and unemployed, so labor force = employed +
unemployed = 137,792 + 15,267 = 153,059 (all numbers in thousands).
2.
The unemployment rate is the fraction of the labor force that is unemployed, calculated as unemployment
rate = (unemployed/labor force) × 100 = (15,267/153,059) × 100 = 0.0997 × 100 = 9.97% or 10.0% (rounding
to one decimal place).
3.
The labor force participation rate is the fraction of the civilian, non-institutionalized population that is in the
labor force, calculated as labor force participation rate = (labor force/civilian population) × 100 =
(153,059/236,925) × 100 = 0.646 × 100 = 64.6%.
4.
For women, unemployment rate = (unemployed/labor force) × 100 = (6,312/71,605) × 100 = 0.0882 × 100 =
8.8%. For men, unemployment rate = (unemployed/labor force) × 100 = (8,955/81,454) × 100 = 0.1099 × 100
= 10.99% or 11.0% (rounding to one decimal place). Thus, the unemployment rate is higher among men.
5.
For women, labor force participation rate = (labor force/civilian population) × 100 = (71,605/122,197) × 100
= 0.586 × 100 = 58.6%. For men, labor force participation rate = (labor force/civilian population) × 100 =
(81,454/114,728) × 100 = 0.7099 × 100 = 70.99% or 71.0% (rounding to one decimal place). Thus, the labor
force participation rate is higher among men.
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