Question

In: Economics

  A country’s labor force is the sum of its employed and unemployed workers.    The following data...

  A country’s labor force is the sum of its employed and unemployed workers.    The following data is taken from the Bureau of Labor statistics (measured in the thousands).

Labor force (Thousands)

Unemployed (Thousands)

Region

March 2007

March 2008

March 2007

March 2008

Northeast

27863.5

28035.6

1197.8

1350.3

South

54203.8

54873.9

2300.9

2573.8

Midwest

35824.3

35048.6

1718.2

1870.8

West

35231.8

35903.3

1588.0

1914.9


a) Calculate the number of workers employed in each of the regions in March 2007 and March 2008. Use these numbers of calculate the change in the total number of workers employed between March 2007 an March 2008.

b) For each region calculate the growth in the labor force from March 2007 to March 2008.

c) Compute the unemployment rates in the different regions of the country in March 2007 and March 2008.

d)What can you infer about the rise in unemployment rates over this period? Was it caused by a net loss in the number of jobs or by a large increase in the number of people looking for work?

Solutions

Expert Solution

(a)

(1) Number employed = Labor force - Number unemployed

Labor force (Thousands) Unemployed (Thousands) Employed (Thousands)
Region Mar-07 Mar-08 Mar-07 Mar-08 Mar-07 Mar-08
Northeast 27863.5 28035.6 1197.8 1350.3 26665.7 26685.3
South 54203.8 54873.9 2300.9 2573.8 51902.9 52300.1
Midwest 35824.3 35048.6 1718.2 1870.8 34106.1 33177.8
West 35231.8 35903.3 1588 1914.9 33643.8 33988.4

(2) Change in number employed is computed as follows.

Employed (Thousands) Change in Number Employed (Thousands)
Region Mar-07 Mar-08 Mar-08
Northeast 26665.7 26685.3 19.6
South 51902.9 52300.1 397.2
Midwest 34106.1 33177.8 -928.3
West 33643.8 33988.4 344.6

(b)

Labor force (Thousands) Growth in Labor Force
Region Mar-07 Mar-08 Mar-08
Northeast 27863.5 28035.6 0.62%
South 54203.8 54873.9 1.24%
Midwest 35824.3 35048.6 -2.17%
West 35231.8 35903.3 1.91%

(c) Unemployment rate = Number Unemployed / Labor Force

Labor force (Thousands) Unemployed (Thousands) Unemployment Rate Growth in Unemployment Rate
Region Mar-07 Mar-08 Mar-07 Mar-08 Mar-07 Mar-08 Mar-08
Northeast 27863.5 28035.6 1197.8 1350.3 4.30% 4.82% 12.04%
South 54203.8 54873.9 2300.9 2573.8 4.24% 4.69% 10.49%
Midwest 35824.3 35048.6 1718.2 1870.8 4.80% 5.34% 11.29%
West 35231.8 35903.3 1588 1914.9 4.51% 5.33% 18.33%

(d) Unemployment rate showed highest percentage increase in West region and lowest percentage increase in South region. Since labor force growth rate is lower than unemployment growth rate, this rise in unemployment was most likely caused by a loss in number of jobs.

Rahul Sunny answered 1 year ago
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