Economics Questions

Rate of Employment = #persons employed x 100

#Labor Force

So if 90m persons are employed in a country’s LF and the LF is made up of 120m persons, then the rate of employment =

90m\120m x 100= 75%

Hence the rate of employment =75% of the LF. Thus, the rate of employment is the percentage of the LF of a country that is employed (in this case 75%) while employment is the absolute # of persons (in our example 90 m persons) who are employed i.e. who have jobs whether full time, part time, self-employed or even underemployed, the BLS counts all those with jobs whether they work in the public or private sector.

•Rate of Unemployment v Unemployment

Rate of Unemployment = #persons unemployed x 100

#Labor Force

Thus, if 10m persons are unemployed in a country’s LF and the LF is made up of the same 120m persons, then the rate of unemployment =

10m\120m x 100= 8%

So the rate of unemployment =8% of the LF. Thus, the rate of unemployment is the percentage of the LF of a country that is unemployed (in this case 8%) while unemployment is the absolute # of persons (in our example 10m) who are unemployed i.e. who have no jobs though to be counted in the LF by the BLS, they must be actively searching gainful employment.

•Rate of Underemployment v Underemployment

Rate of Underemployment = #persons underemployed x 100

#Labor Force

Thus, if 20m persons are underemployed in a country’s LF and the LF is made up of the same 120m persons, then the rate of underemployment =

20m\120m x 100= 17%

So the rate of underemployment =17% of the LF. Thus, the rate of underemployment is the percentage of the LF of a country that is unemployed (in this case 17%) while underemployment is the absolute # of persons (in our example 20m) who are underemployed i.e. who are working at jobs for which they are much more qualified, for example a BSc in Chemistry working at a local McDonald as a cashier. The underemployed are counted by the BLS in a country’s LF as being gainfully employed.

•Rate of Labor Force Participation or RLFP v Labor Force Participation or LFP

RLFP = # personas in LF/# personas of working age X 100

So whereas the RLFP is a percentage of different groups of people who participate in the LF by gender, race, ethnicity, religion, education etc. who are of working age in the US (16 years or older), the LFP is the absolute# of personas in these different groups who participate in the LF of a country.