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Chapter 21: Q 8. (page 524)

What is the difference between being unemployed

and being out of the labor force?

Short Answer

Expert verified

There is a very thin line between a person who is unemployed and a person who is out of the workforce.

Step by step solution

01

Step 1. Introduction

The persons who have no work or no job can be categorized into one of the two categories either out of the labor force or unemployed.

So, in order to clear this fuzzy line between unemployed and out of the workforce, we have to know the concept and definition.

02

Step 2. Explanation

Unemployed is a person who is constantly looking for a job or work and he/she is also capable of doing work but don’t able to get a job then they are unemployed.

On the other hand, being out of the workforce means a person is capable of doing work but he/she is not constantly looking for the job as a person who is out of the workforce. For example, students and retired persons.

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Most popular questions from this chapter

The U.S. unemployment rate increased from 4.6%

in July 2001 to 5.9% by June 2002. Without studying the subject in any detail, would you expect that a change of this kind is more likely to be due to cyclical unemployment or a change in the natural rate of unemployment? Why?

Are U.S. unemployment rates typically higher, lower, or about the same as unemployment rates in other high-income countries?

Under what condition would a decrease in

unemployment be bad for the economy?

Is it desirable to eliminate natural unemployment? Why or why not?

A country with a population of eight million adults has five million employed, 500,000 unemployed, and the rest of the adult population is out of the labor force. What’s the unemployment rate? What share of the population is in the labor force? Sketch a pie chart that divides the adult population into these three groups.
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