Assume a country has a total population of 58 million, of which 70 per cent are part of the working-age population. 23.7 million working-age people are not looking for a job, and 11.35 million are employed. What are the labour force participation rate (LFPR) and the unemployment rate (u)?a.LFPR = 41.6%; u = 19.5%b.LFPR = 41.6%; u = 32.8%c.LFPR = 59.4%; u = 19.5%d.LFPR = 59.4%; u = 32.8%
Question
Assume a country has a total population of 58 million, of which 70 per cent are part of the working-age population. 23.7 million working-age people are not looking for a job, and 11.35 million are employed. What are the labour force participation rate (LFPR) and the unemployment rate (u)?a.LFPR = 41.6%; u = 19.5%b.LFPR = 41.6%; u = 32.8%c.LFPR = 59.4%; u = 19.5%d.LFPR = 59.4%; u = 32.8%
Solution
The labour force participation rate (LFPR) is calculated as the sum of employed and unemployed individuals divided by the total working-age population. The unemployment rate (u) is calculated as the number of unemployed individuals divided by the total labour force.
Step 1: Calculate the working-age population 70% of 58 million = 0.70 * 58,000,000 = 40,600,000
Step 2: Calculate the number of people in the labour force The labour force is the number of people who are either employed or actively looking for work. In this case, it's the working-age population minus those not looking for a job. So, Labour force = Working-age population - People not looking for a job = 40,600,000 - 23,700,000 = 16,900,000
Step 3: Calculate the LFPR LFPR = (Labour force / Working-age population) * 100 = (16,900,000 / 40,600,000) * 100 = 41.6%
Step 4: Calculate the number of unemployed people Unemployed people = Labour force - Employed people = 16,900,000 - 11,350,000 = 5,550,000
Step 5: Calculate the unemployment rate (u) u = (Unemployed people / Labour force) * 100 = (5,550,000 / 16,900,000) * 100 = 32.8%
So, the LFPR is 41.6% and the unemployment rate is 32.8%. Therefore, the correct answer is b. LFPR = 41.6%; u = 32.8%.
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