Question

1. Compared with unemployment rate, employment rate is often believed to be a better measure of the labor market. Please explain why it is better. On the other hand, employment rate also has its limitation. Please explain its limitation.

Answer 1

In the labor market employment rate is often believed to be a better measure because employment rate is consistent than unemployment rate. In the employment rate those person taken into consideration who are engaged and also employment rate is more positive than unemployment rate. Employment rate is always treated as good as it shows good employment opportunities are available in market.

Although it has following limitations:

1. Every person does not have voluntary employment

2. Current wage rate is sometimes less than expected wage rate.

3. All labors did not get desired job.