Macroeconomics

‭Unemployment rate =‬ ‭ ‬ ‭ ‬‭‬+‭‬‭ ‬ ‭ ‭ ‬ ‬‭‬‭ ‬ ‭2.‬ ‭The‬ ‭labor‬‭force‬‭participation‬‭rate‬ ‭,‬‭which‬‭is‬‭the‬‭proportion‬‭of‬‭the‬‭population‬‭that‬‭are‬‭of‬‭working‬ ‭age‬‭(16‬‭years‬‭and‬‭older)‬‭and‬‭who‬‭are‬‭either‬‭working‬‭or‬‭actively‬‭seeking‬‭work.‬‭This‬‭measures‬‭the‬ ‭percentage of economically active people.‬ ‭× 100 =‬ ‭× 100‬

‭× 100‬ ‭ ‬‭‬‭ ‬ ‭ ‬‭‬‭ ‬

‭Labor force participation rate =‬

‭=‬ ‭ ‬‭‬‭ ‬ ‭ ‬‭‬‭ ‬‭‬+‭‬‭ ‬‭‬‭ ‬‭‬‭ ‬‭‬‭ ‬ ‭Example of Calculating the Unemployment Rate and the Labor Force Participation Rate:‬ ‭× 100‬

‭The following table shows labor-market data for a country.‬

‭Table 4: Employment Data‬ ‭Employed‬

‭200,000‬

‭Unemployed‬

‭30,000‬

‭Not in the labor force‬

‭100,000‬

‭× 100 =‬ ‭ ‬ ‭ ‬‭‬+‭‬‭ ‬ ‭ ‭ ‬ ‬‭‬‭ ‬ ‭=‬ ‭× 100 ≈ 13.04%‬ ‭30‬,‭000‬ ‭200‬,‭000‬‭‬+‭‬‭30‬,‭000‬ ‭× 100‬ ‭ ‬‭‬‭ ‬ ‭ ‬‭‬‭ ‬

‭●‬ ‭Unemployment rate =‬

‭× 100‬

‭●‬ ‭Labor force participation rate =‬

‭ ‬‭‬‭ ‬ ‭ ‭‬‬‭ ‬‭‬+‭‬‭ ‬‭‬‭ ‬‭‬‭ ‬‭‬‭ ‬

‭230‬,‭000‬ ‭230‬,‭000‬‭‬+‭‬‭100‬,‭000‬

‭=‬

‭× 100 =‬

‭× 100 ≈ 69.6%‬

‭Types of Unemployment‬ ‭●‬ ‭Structural‬ ‭Unemployment:‬ ‭This‬ ‭type‬ ‭of‬ ‭unemployment‬ ‭occurs‬ ‭when‬ ‭there‬ ‭is‬ ‭a‬ ‭mismatch‬ ‭between‬ ‭the‬ ‭skills‬ ‭and‬ ‭qualifcations‬ ‭of‬ ‭workers‬ ‭and‬ ‭the‬ ‭requirements‬ ‭of‬ ‭available‬ ‭jobs‬ ‭.‬ ‭Structural‬ ‭unemployment‬ ‭often‬ ‭results‬ ‭from‬ ‭changes‬ ‭in‬ ‭the‬ ‭economy,‬ ‭such‬ ‭as‬ ‭technological‬ ‭advancements‬ ‭or‬ ‭shifts‬ ‭in‬ ‭consumer‬ ‭demand,‬ ‭that‬ ‭render‬‭certain‬‭skills‬‭or‬‭industries‬‭obsolete.‬ ‭Workers‬ ‭affected‬‭by‬‭structural‬‭unemployment‬‭may‬‭need‬‭to‬‭retrain‬‭or‬‭acquire‬‭new‬‭skills‬‭to‬‭fnd‬ ‭employment in different felds.‬

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