Question

Which of the following would cause a decline in the labor force participation rate?

An increase in the number of discouraged workers in the country.

Many employed workers get laid off and now are looking for new jobs.

High wages entice retirees (those outside the labor force) to begin searching for work.

A decrease in the unemployment rate.

Answer 1

Labor force participation rate = (Labor force/ working age population )100

An increase in the number of discouraged workers in the country would cause a decline in the labor force participation rate . Because as discouraged workers increase , labor force decline (which is labor force= unemployed +employed ,when discouraged workers increases ,then the number of labor force will decline). Therefore , labor force participation rate would decline. Hence, option(A) is correct.