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Chapter 21: Q 12. (page 524)

What happens to the unemployment rate when unemployed workers are reclassified as discouraged workers?

Short Answer

Expert verified

The unemployment rate will decline.

Step by step solution

01

Step 1. Definition

Discouraged workers are defined as the workers who have discontinued their looking for a job as they are not finding employment options and failed to be nominated for a job. Because of this they are discouraged and classified under discouraged workers.

02

Step 2. Explanation

Discouraged workers are neither employed nor unemployed. They are also out of the labor force.

03

Step 3. Conclusion

So, when unemployed workers are classified as discouraged workers the total workforce decreases, and in turn, the unemployment rate dips as the unemployed population declines because the unemployed are now classified under discouraged workers.

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Most popular questions from this chapter

Assess whether the following would be counted as “unemployed” in the Current Employment Statistics survey.

a. A husband willingly stays home with children while his wife works.

b. A manufacturing worker whose factory just closed down.

c. A college student doing an unpaid summer internship.

d. A retiree.

e. Someone who has been out of work for two years but keeps looking for a job.

f. Someone who has been out of work for two months but isn’t looking for a job.

g. Someone who hates her present job and is

actively looking for another one.

h. Someone who decides to take a part-time job because she could not find a full-time position.

Using the definition of the unemployment rate, is an increase in the unemployment rate necessarily a bad thing for a nation?

Suppose the adult population over the age of 16 is 237.8 million and the labor force is 153.9 million (of whom 139.1 million are employed). How many people are “not in the labor force?” What are the proportions of employed, unemployed and not in the labor force in the population? Hint: Proportions are percentages.

Is a decrease in the unemployment rate necessarily a good thing for a nation? Explain.

How do you calculate the unemployment rate? How do you calculate the labor force participation rate?
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