Excluding discouraged workers from the official unemployment rate may cause the official rate to the true extent of underemploym

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9 months ago

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Alenkasestr [34] · Answer 1 · 2024-07-28T11:50:14+03:00

Excluding discouraged workers from the official unemployment rate may cause the official rate to Understate the true extent of underemployment.

What happens when they are reclassified as discouraged workers?

The measured unemployment rate will decrease if unemployed people give up.
When this occurs, the measured unemployment rate will momentarily increase. They will once more be listed as unemployed, which is why.
Because there are no discouraged employees in the labor market actively looking for a job, the labor force participation rate would fall if employed people were reclassified as discouraged workers.

(1) official unemployment rate= unemployed/(employed + unemployed)

= 6197000 / 155604000 + 6197000 * 100

= 3.83%

(2) U-4 unemployment rate= (unemployed +discouraged) /(employed +unemployed+ discouraged)

=6197000+ 434000 / 155604000+ 6197000 + 434000 * 100

= 4.09%

Excluding discouraged workers from the official unemployment rate may cause the official rate to Understate the true extent of underemployment.

To learn more about the unemployed, refer to:

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