Question

Assume that following data belongs to Turkey. Total population is 83m, population over 16 ages are 60 m, employed is 34m, and unemployed is 7m which is including 3 million discouraged young job seekers. Answer the followings i) calculate the official unemployment rate which is narrowly defined unemployment rate ii) calculate the wider unemployment rate which includes discouraged young job seekers, You must show your calculation and express in percent terms. iii)Explain the logic behind such calculation of the wider unemployment rate, iv) interpret the figure 6.3 on page 124 (Alternative Measures of Unemployment, February 2010)

Answer 1

1. Unemployment rate = (Unemployed narrow / labour force) * 100

labour force = 34, people aged between 16-60 years. In narrower sense we won't include discouraged young job seekers , because they are no more looking for jobs. They maybe learning, doing nothing..etc.

   labour force = 34m, these are people able to do work. Here narrow, unemployment = 7-3 =4m

  Unemployment rate = (4 / 34) * 100 = 11.76%

2. Unemployment rate = (Unemployed wider / labour force) * 100

labour force = 34, people aged between 16-60 years. In wider sense we include discouraged young job seekers , even they are not more looking for jobs. They may be searched for jobs long time before and mentally depressed to search further more.

   labour force = 34m, these are people able to do work. Here wider, unemployment = 7m

  Unemployment rate = (7 / 34) * 100 = 20.58%

3. Wider unemploment is important because, it shows our untapped pottential of human capital. We wil get more and efficient output if we include them in our labour force. We also needed to find the reasons for their discouragement and if they stoped looking for jobs due to lack of jobs, skills and all rather than studying in colleges..etc, then we have to design policies for them.