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Chapter 7: Problem 8

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

Short Answer

Expert verified
The difference between being unemployed and being out of the labor force lies in the individual's engagement in the job-seeking process. Unemployed individuals are actively looking for work, while those out of the labor force are not. For example, a person actively searching for a job is considered unemployed, while a stay-at-home parent not seeking employment is considered out of the labor force.

Step by step solution

01

Unemployed Definition

An individual is considered to be unemployed if they are actively seeking employment but currently without a job. It's important to note that the person must be both jobless and actively searching for work to be classified as unemployed.
02

Out of the Labor Force Definition

Those who are out of the labor force are individuals who are neither employed nor actively searching for employment. People out of the labor force may include students, retirees, stay-at-home parents, or those who are not seeking employment due to personal reasons or disabilities.
03

Explanation of the Difference

The difference between being unemployed and being out of the labor force lies in whether the individual is actively seeking employment or not. Unemployed individuals are actively looking for work, while individuals out of the labor force are not engaged in the job-seeking process.
04

Example

Let's consider two individuals, A and B. Person A has been jobless for a month, but they are actively searching and applying for jobs. Person A is considered unemployed. On the other hand, Person B is a stay-at-home parent who is not seeking employment. Person B is considered to be out of the labor force. In summary, the key difference between being unemployed and being out of the labor force is the individual's involvement in active job-seeking behavior.

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Most popular questions from this chapter

Unemployment rates have been higher in many European countries in recent decades than in the United States. Is the main reason for this long-term difference in unemployment rates more likely to be cyclical unemployment or the natural rate of unemployment? Explain briefly.

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. 8\. 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.

What term describes the remaining level of unemployment that occurs even when the economy is healthy?

Whose unemployment rates are commonly higher in the U.S. economy: a. Whites or nonwhites? b. The young or the middle-aged? c. College graduates or high school graduates?

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