Essay Labour Force Participation Rate ( Lfpr )

1512 Words May 22nd, 2016 null Page
Labour force participation rate (LFPR)
Working age population (WAP) - Number of people Not in the labour force = Labour force (LF)
LF/(WAP)= LFPR 12,900,000 – 100,000 = 12,800,000

(12800000/12900000)*100 = 99.2%

Labour force participation rate = 99.2%

Unemployment rate (UER)
Labour force – (Full time employees + Part time employees) = Number of unemployed people
Number of unemployed people / Labour force = unemployment rate
X = Number of employed people = Full time employees + Part time employees
X = 4,953,000 + (0.18X)
X = 6,040,243

12,800,000 – 6,040,243 = 6,759,757

6,759,757 / 12,800,000 = 52.8%

Unemployment rate = 52.8%

Question 1B (5 marks)

Year 2005 2006
Population 15,000,000 15,000,000
Working age population 12,900,000 12,900,000
Number of people Not in the labour force 100,000 2,900,000

Part-time employment as a percentage of total employment 18% 18%
Number of full-time employees 4,953,000 4,953,000

Rate of underemployment 40% 40%

The unemployment rate can fall without the creation of new jobs, if people without a job who are actively searching for a job stop searching. They will then fall out of the labour force, which gives us a lower labour force without affecting the people working.
In the example above the labour force consists of 10,000,000 people instead of 12,800,000. This leads to:

LF – Employed people = Unemployed people
10,000,000 – 6,040,243 = 3,959,757

Unemployed people / LF = UER
3,959,757 / 10,000,000 = 39.6%

Now…

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