In: Economics
During the course of a year, the labor force consists of the same 963963 people. Of these, 1515 lack skills that employers desire and hence remain unemployed throughout the year. At the same time, every month during the year, 3939 different people become unemployed, and 3939 other different people who were unemployed find jobs. There is no cyclical unemployment.
Solution:-
Calculate the frictional unemployment rate -
Frictional unemployment = 39
labor force = 963
Frictional unemployment rate = (Frictional unemployment/Labor force)*100
= (39 / 963) * 100
= 4.05%
The frictional unemployment rate is 4.05%.
Calculate the unemployment rate -
Total unemployment = Frictional unemployment + Structural unemployment
= 39 + 15
= 54
Unemployment rate = (Total unemployment/Labor force) * 100
= (54 / 963) * 100
= 6.16%
The unemployment rate is 5.61%.