Question

1. Define labor force participation rate and list three reasons that causes an increase in the female labor force participation rate.

2. The following labor statistics is presented to you are the data for males and females ages 16 and over in the imaginary country of Lakita. Not in labor force 45 million; Unemployed 5 million; Employed 85.

1. What is the adult population in Lakita?

2. What is the unemployment rate in Lakita?

3. What is the labor force participation rate for Lakita?

Answer 1

Labor force participation is defined as the number of people who are either employed or unemployed out of adult population of a nation. It explains about the participation of adult population in employment aspects.

Reasons are:

1. Increase in wages: Higher the wages more would be the increase in female labor force participation

2. Financial stability: More the female participation more would be financial stability

3. Disposable income: With increase in employment opportunity, the disposable income for female increase

i. Adult population = Not in labor force + Unemployed + Employed = 45+5+85=135 million

ii. Unemployment rate = (Unemployed/(Unemployed+employed))*100 = (5/(5+85))*100 = 5.56 percent

iii. Labor force participation rate = (Labor force/Adult population)*100 = (90/135)*100 = 66.67 percent