Author Question: Explain how the existence of discouraged workers alters the extent to which the official ... (Read 124 times)

ss2343 · **on:** Jun 30, 2018

Explain how the existence of discouraged workers alters the extent to which the official unemployment provides an accurate measure of the use of labor resources.

What will be an ideal response?

Question 2

Explain the difference between the unemployment rate and the participation rate.

What will be an ideal response?

samiel-sayed · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

Discouraged workers are those individuals who have decided to stop searching for employment because they have become discouraged about employment opportunities. At some point, these individuals will no longer be considered as part of the labor force. The existence of discouraged workers will cause the official unemployment rate to provide an under-estimate of the underutilization of labor.

Answer to Question 2

The unemployment rate is the percentage of the labor force (those employed and unemployed) that is unemployed. The participation rate is the percentage of the working age population that is in the labor force.