Question

What can be the reason of decrease in Unemployment Rate but also decrease in Labour Force Participation Rate of a country? Do people stop seeking for a job??

Answer 1

Decrease in the labour participation rate can be due to various factors and this is due to the increase in the number of discouraged workers where they have been actively looking for a job for a certain period of time and after that this stoppedis there confidence levels of getting a job decreased and that is the reason why people can stop seeking for a job. Another reason for decreasing the labour force participation rate is due to the discrimination and faulty practices in the workplace such as harrassment etc. discrimination in the workplace in terms of race and gender can also be a reason why the labour force participation rate can decrease on the whole. and that is the reason why all the above mentioned reasons can be motivate the people to look for a job and that is why they can stop seeking for the job and depend on saving on the whole