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Chapter 8: Q.8 (page 214)

What is the difference between being unemployed and being out of the labor force?

Short Answer

Expert verified

Unemployed means able and willing to work but no job. Out of labor force means not willing to work.

Step by step solution

01

Step.1 Introduction

Unemployment can be defined as the situation when a person who is able to work and is work, is also actively looking for jobs but is not able to find one. The percentage of working population that cannot find work is known as unemployment rate.

02

Step.2 Explanation

The unemployment rate can be obtained by the ratio of total unemployed persons and labor force participation rate.

The percentage of adult population who are able to work and willing to work are included in the labor force. This consists of both people who are working, i.e. employed, and those who can't find work i.e unemployed.

03

Step 3. Difference

Out of labor force means the part of adult population that is not willing to work or not able to work. For instance, retired individuals, students, parents on a maternity break, etc.

Being unemployed means a person is consistently looking for jobs but is not able to find one. When out of labor force, people are not looking for jobs actively.

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Most popular questions from this chapter

As the baby boomer generation retires, what should happen to wages and employment? Can you show this graphically?

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

What are some of the problems with using the unemployment rate as an accurate measure of overall joblessness?

Is the increase in labor force participation rates among women better thought of as causing an increase in cyclical unemployment or an increase in the natural rate of unemployment? Why?

Name and explain some of the reasons why wages are likely to be sticky, especially in downward adjustments.
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