Question

In July 2017, in the economy of Sandy Island, 10,000 people were employed, 1,000 were unemployed, and 5,000 were not in the labor force. During August 2017, 80 people lost their jobs and didn’t look for new ones, 20 people quit their jobs and retired, 150 unemployed people were hired, 50 people quit the labor force, and 40 people entered the labor force to look for work. Calculate for July 2017

1. The unemployment rates.
2. The employment-to-population ratio.

And calculate for the end of August 2017

3. The number of people unemployed.
4. The number of people employed.
5. The unemployment rates.

Answer 1

Solution:-

a) The Unemployment rate is the percentage of the people in the labour force who are unemployed.

Unemployed Rate = (No. of people unemployed /Labour force) * 100

Here,

They said 5000 were not in labor force but it does not mean that they are unemployed so while calculating unemployment rate we will not include this 5000 units.

As we know that labour force is the addition of employed people and unemployed people, so we can easily calculate the labour force to find the unemployment rate.

So,

Labour force = No. of people employed + No. of people Unemplyed

                        = 10000 + 1000 = 11000

Here, the Unemployment Rate   = (1000/11000) * 100

                                                           = (1/11) * 100

Hence, the Unemployment Rate = 9.09%

b) The employment to population is the percentage of people of working age who have jobs.

That is,

Employment to population Ratio = (No. of people employed/ Working age Population) *100

So,

Labour force = No. of people employed + No. of people Unemplyed

                        = 10000 + 1000 = 11000

Now to find out the working age population:

As we know that the working age population is the addition of labour force and who are not in labour force.

The working age Population = 11000 +5000 =16,000

Therefore, we can easily determine the employment to population Ration using above formula:

Employment to population Ration = (10,000/16,000)*100

                                                              = (10/16) * 100

Employment to population Ration = 62.5%

And calculate for the end of August 2017

a) Total Number of people unemployed here is as follow:

No. of people Unemployed = 1000 +40 -150 – 50

                                                 = 1040 -200 = 840

Hence, total No. of people unemployed here is 840

b) In July Initially 10,000 people were employed. But the end of august 80 people losing their jobs, 20 people quit their job and 150 unemployed people hired.

Therefore, total number of people employed here is as follows:

No. of people employed = 10000-80-20+150

                                              =10150-100 = 10,050

Hence, total number of people employed is 10,050

c) Unemployment rate = (No. of people unemployed/Labour force) * 100

Hence, Labour Force = No. of people employed + No. of people Unemployed Therefore,

              Labour force = 10050 + 840 = 10,890

Here, The unemployment Rate = (840/10,890) *100

                                                         = 0.07713 *100

                                                         =7.71%

Hence, The unemployment Rate = 7.71%