Question

Total Population	800M
Non-institutionalized population over the age of 16 =	560M
Number of people potentially available for civilian employment
Number of those potentially available for employment who are	76M
neither working nor looking for work
Number of people working	440M
Natural rate of unemployment	5%

1) A) Explain the difference in concept between total population and the potential labor force.

B) Who makes up the labor force and how much is it in the numerical example above?

C) Define using a paradigm the labor force participation rate.

and D) calculate it.

E) Define using a paradigm, unemployment and the unemployment rate.

and D) calculate them from the table above.

Answer 1

A) Total population is the total Number of people in the economy. While potential labor force refers to population above 16 who are available for civilian employment.

B)Among potential Labour force population ,those who are willing to work , either working or looking for work make labor force.

Labour force=560-76=484 million

C)The percentage of total potential Labour force ,ends up in actual Labour force is called participation rate.

Participation rate=484/560]*100=86.43%

D) Among actual Labour force population, people who are currently are not working or looking for work ,are called unemployed.

Unemployed population=484-440=44 million

Unemployment rate=44/484]*100=9.09%