Question 1A (5 marks)

The table below reports some labour market figures for a hypothetical country, Blefuscu in 2005. Assume that there are only two types of employment: full time and part time. Everyone who is not employed is unemployed. Calculate the Labour force participation and ii) unemployment rate. Show all your calculations. (5 marks)

 

Population	1,300,000
Working age population	850,000
Number of people Not in the labour force	297,500
Part-time employment as a percentage of total employment	20%
Number of full-time employees	416,364
Rate of underemployment	37%

 

 

 

Question 1B (5 marks)

The government of Blefuscu announces that the unemployment rate fell from 2005 to 2006. The government says this is positive news as it shows more jobs are being created and less people are unemployed. The labour unions, on the other hand, disagreed with this assessment and stated that they could find no evidence that additional jobs have been created between 2005 and 2006.

 

Your task is to explain how the unemployment rate can fall even if there are no new jobs being created. First, using the numbers you have been given in 1A as the 2005 figures, fill in the table below by developing a set of numbers that show how the unemployment rate can fall even if there are no new jobs being created. Assume no change between 2005 and 2006 in the population, percentage of part time workers and working age population. Second, discuss in detail how the numbers show the unemployment rate can fall even if there are no new jobs being created. List two possible reasons why this may occur.

 

Year	2005	2006
Population	1,300,000	1,300,000
Working age population	850,000	850,000
Number of people Not in the labour force	297,500	  ______ Â
Part-time employment as a percentage of total employment	20%	___%
Number of full-time employees	416,364	  _____
  Rate of underemployment	37%	___%

 

For 1A I keep getting the following,

Question 1A)

 

• To find the labour force participation, must find people in the labour force.

 

Working age population= 850,000

 

Working-age population – people not in labour force (850,000- 297,500) = 552,500

 

552,500 people in the Labour force.

 

Labour force participation rate = Labour force/Working-age population x 100

 

(552,500/850,000) x 100 = 65%

 

Labour force participation is 65% or 0.65

 

And 1b)

• Unemployment rate = (number of people unemployed/labour force) x 100

 

To find the total amount of employed people must find the total amount of part time employees

 

20% of 552,500 = 110,500

 

Add this to the total amount of full-time to make the total of employees.

110,500 + 416,364 = 526,864

 

Finding the amount of people unemployed (working age population – people employed)

552,500 – 526,864 = 25,636

 

Now to go back to finding the unemployment rate which is unemployed/labour force.

(25,636/552,500) x 100 = 4.64%

 

 

Im not sure what I am doing wrong.