Chapter 10, Problem 1P

To determine

(a)

To compute:

The labor force participation rate for the given situation.

Answer to Problem 1P

The labor force participation is $80\%$ if the total adult population $=200\text{million}$, the labor force $=160\text{million}$ and employment $=140\text{million}$.

Explanation of Solution

Given information:

Total adult population $=200\text{million}$

The labor force $=160\text{million}$

Calculation for labor force participation:

$\begin{array}{c}\text{Labor}\text{force}\text{participation}=\frac{\text{Labor}\text{force}}{\text{Total}\text{adult}\text{population}}\times 100\\ =\frac{160\text{million}}{200\text{million}}\times 100\\ =80\end{array}$

Hence, the labor force participation is $80\%$.

Economics Concept Introduction

Labor force participation:

It refers to that percentage of current total population that is willing to work or is working;which means the labor force in total adult population.

$\text{Labor}\text{force}\text{participation}=\frac{\text{Labor}\text{force}}{\text{Total}\text{adult}\text{population}}\times 100$

To determine

(b)

To compute:

The labor force participation rate for the given situation.

Answer to Problem 1P

The labor force participation is $70\%$ if

$\text{Total}\text{adult}\text{population}=\text{200}\text{million}$, $\text{the}\text{labor}\text{force}=140\text{million,}\text{and}\text{employment}=120\text{million}$.

Explanation of Solution

Given information:

Total adult population $=200\text{million}$

The labor force $=140\text{million}$

Calculation for labor force participation:

$\begin{array}{c}\text{Labor}\text{force}\text{participation}=\frac{\text{Labor}\text{force}}{\text{Total}\text{adult}\text{population}}\times 100\\ =\frac{140\text{million}}{200\text{million}}\times 100\\ =70\end{array}$

Labor force participation is $70\%$.

Economics Concept Introduction

Labor force participation:

It refers to that percentage of current total population that is willing to work or is working;which means the labor force in total adult population.

$\text{Labor}\text{force}\text{participation}=\frac{\text{Labor}\text{force}}{\text{Total}\text{adult}\text{population}}\times 100$

To determine

(c)

To compute:

The labor force participation rate for the given situation.

Answer to Problem 1P

Labor force participation will be $65\%$ If $30\text{million}$ people have lost, their jobs and all of them exited the labor force

Explanation of Solution

Given information:

Total adult population $=200\text{million}$

The labor force $=160\text{million}$

Calculation for labor force participation:

  $\begin{array}{c}\text{Labor}\text{force}\text{participation}=\frac{\text{Labor}\text{force}}{\text{Total}\text{adult}\text{population}}\times 100\\ =\frac{160\text{million}}{200\text{million}}\times 100\\ =80\end{array}$

Labor force participation is $80\%$

It is the initial labor force participation.

Now, if $30\text{million}$ people have lost their jobs and all of them exit the labor force, then the new labor force will be130 million $\left(160\text{million}-30\text{million}\right)$.

The new labor force participation is,

$\begin{array}{c}\text{Labor}\text{force}\text{participation}=\frac{\text{Labor}\text{force}}{\text{Total}\text{adult}\text{population}}\times 100\\ =\frac{130}{200}\times 100\\ =65\end{array}$

Thus, the labor force participation will be $65\%$ if $30\text{million}$ people lost their jobs and all of them exited the labor force.

Economics Concept Introduction

Labor force participation:

It refers to that percentage of current total population that is willing to work or is working;which means the labor force in total adult population.

$\text{Labor}\text{force}\text{participation}=\frac{\text{Labor}\text{force}}{\text{Total}\text{adult}\text{population}}\times 100$

To determine

(d)

To compute:

The labor force participation rate for the given situation.

Answer to Problem 1P

Labor force participation will be $85\%$ if employment rises from $140\text{million}$ to $150\text{million}$.

Explanation of Solution

Given information:

Total adult population $=200\text{million}$

The labor force $=160\text{million}$

Calculation for labor force participation:

$\begin{array}{c}\text{Labor}\text{force}\text{participation}=\frac{\text{Labor}\text{force}}{\text{Total}\text{adult}\text{population}}\times 100\\ =\frac{160\text{million}}{200\text{million}}\times 100\\ =80\end{array}$

Labor force participation is $80\%$. It is the initial labor force participation.

Now,

If employment rose from $140\text{million}$ to $150\text{million}$, this means the labor force increased from $160\text{milllion}$ and $10\text{million}$ .Total number of labor force is $170\text{million}$.

Calculation of labor force participation:

$\begin{array}{c}\text{Labor}\text{force}\text{participation}=\frac{\text{Labor}\text{force}}{\text{Total}\text{adult}\text{population}}\times 100\\ =\frac{170\text{million}}{200\text{million}}\times 100\\ =85\end{array}$

Thus, the labor force participation will be $85\%$ if employment rose from $140\text{million}$ to $150\text{million}$.

Economics Concept Introduction

Labor force participation:

It refers to that percentage of current total population that is willing to work or is working;which means the labor force in total adult population.

$\text{Labor}\text{force}\text{participation}=\frac{\text{Labor}\text{force}}{\text{Total}\text{adult}\text{population}}\times 100$