Chapter 5, Problem 1SPA

(a)

To determine

Identify the unemployment rate.

Explanation of Solution

The unemployment rate can calculated by using the following formula:

$\text{Unemployment rate }=\frac{\text{Number of people unemployed}}{\text{Labor force }}\times 100$        (1)

The labor force is sum of the unemployed group and the employed group. Therefore, since total labor force is 153.7 million and the employment is 139.1 million, the number of people unemployed is 14.4 million $\left(153.7\text{million}-139.1\text{million}\right)$.

Substitute the values into Eqution-1, to get the value of unemployment rate as follows:

$\begin{array}{c}\text{Unemployment rate }=\frac{\text{14}\text{.6}}{\text{153}\text{.7 }}\times 100\\ =9.49\end{array}$

Thus, the unemployment rate is 9.49 percent.

Economics Concept Introduction

Unemployment rate: The unemployment rate indicates the percentage of population that is without jobs but actively seeking employment. 

(b)

To determine

Identify the labor force participation rate.

Explanation of Solution

Since the working age population is 254 million and the labor force is 160 million, the labor force participation rate can be calculated as follows.

$\begin{array}{c}\text{Labor force partcipation rate }=\frac{\text{Labor force}}{\text{ Working age population}}\times 100\\ =\frac{153.7}{237.9}\times 100\\ =64.60\end{array}$       

Thus, the labor force participation rate is around 63 percent.

Economics Concept Introduction

Labor force participation rate: The labor force participation rate indicates the percentage of the population that is in the labor force.

(c)

To determine

Identify the employment-to-population rate.

Explanation of Solution

Since the working age population is 237.9 million and the number of people employed is 139.1 million, the employment-to-population rate can be calculated as follows.

$\begin{array}{c}\text{Employment-to-population rate }=\frac{\text{Number of people employed}}{\text{ Working age population}}\times 100\\ =\frac{\text{139}\text{.1}}{237.9}\times 100\\ =58.46\end{array}$

Thus, the employment-to-population rate is 58.46 percent.

Economics Concept Introduction

Employment-to-population ratio: The employment–to-population ratio indicates employment as a percentage of working age population.