Question

1. Indicate whether the following people are employed, unemployed or not in the labor force. Explain.

a) An Air-Force officer stationed in Colorado Springs, CO

b) A consultant who works out of her home for a medical group

c) A full-time student who does not work

d) A new college graduate looking for work

e) A stay-at-home dad

f) A waiter in Detroit who is laid off as a result of the recession

g) A retired grandfather

2. Calculation of Labor market indicators

Use the following September 2015 data (in millions) for the United States to calculate

(a) the labor force participation rate, (b) unemployment rate, and (c) the employment/population ratio.

September 2015 Data

Civilian Non-Institutional Population (Age 16 and over) 251.3 million

Employed 148.8 million

Not in labor force 94.6 million

Unemployed 7.9 million

Answer 1

1.

a. An Air Force officer stationed in Colarado Springs is not in the labour force. This is because armed forces are not included in civilian labour force.

b. A consultant who works out of her home for a medical group is employed. This is because work done from home is also included as employment.

c. A full time student who does not work is not in the labour force. This is because the student is not seeking employment and is voluntarily out of work in order to focus on education. Voluntarily unemployed are not included in the labour force.

d. A new college graduate looking for work is unemployed. This is because he is looking for work but has not found any yet. He is involutarily unemployed. Involuntarily unemployed are included in the labour force.

e. A stay-at-home dad is not a part of the labour force. He has chosen not to work and stay at home. He is not looking for work as such he is voluntarily unemployed. Voluntarily unemplyed are not included in the labour force.

f.  A waiter in Detroit who is laid off as a result of the recession is unemployed. The waiter has not chosen to leave his job. He lost his job due to recession and is willing to work. He is involuntarily unemployed. Involuntarily unemployed are a part of the labour force.

g. A retired grandfather is not in the labour force. Retired people are not included in labour force.

2.

a.

Civilian Population= 251.3 Million

Employed=148.8 Million

Unemployed= 7.9 Million

Labour Force = Employed + Unemployed

= 156.7 Million

Labour Force Participation Rate = 62.36%

b.

Unemployment Rate= 5.04%

c.