Unemployment: how it is measured and its kinds

Grade 12 Social Studies Worksheet - Building Confidence

Circle the best answer.

1. Read this first

   Use this

   By BLS definitions, a person is unemployed if they have no job, are available for work and have looked for work in the past 4 weeks. The labor force is the employed plus the unemployed. The unemployment rate is the unemployed divided by the labor force.

3. 1.

   Bo finds the unemployment rate. Which answer fits the table?

   • 3.0 percent: 300 of the 10,000 people aged 16 and over in the town
   • 5.0 percent: 300 of the 6,000 people who hold jobs in the town
   • About 4.8 percent: 300 of the 6,300 people in the labor force
   • 37 percent: the 3,700 people outside the labor force out of 10,000
4. 2.

   In Cedar Falls 200 of the 300 unemployed stop looking for work, and nobody gets a job. Esme finds the new rate. What happens?

   Use the picture in question 1.

   • It rises above 4.8 percent, since fewer people in the town now have work to do
   • It falls to about 1.6 percent because the 200 people found jobs in the town
   • It stays at 4.8 percent, since no one found a job and so the unemployed are the same
   • It falls to about 1.6 percent, though nobody found a job: the 200 left the labor force
5. 3.

   Jun finds the labor force participation rate of Cedar Falls. Which answer and meaning fit?

   Use the picture in question 1.

   • 60 percent: 6,000 of 10,000 have jobs, so it shows how many people are employed
   • 63 percent: 6,300 of the 10,000 are working or looking for work
   • 4.8 percent: 300 of 6,300 are without work, so it shows how many people cannot find jobs
   • 37 percent: 3,700 of 10,000 are outside the labor force, so it shows who takes part

6. Use this

   Card A, "Kinds of unemployment" (in our words). Frictional: time spent moving between jobs or finding a first job. Structural: workers' skills or locations do not match the jobs available. Cyclical: too few jobs because the economy is weak. Card B, "BLS counting" (in our words). A person is unemployed if they have no job, are available for work and looked for work in the past 4 weeks. Others without jobs are not in the labor force. Card C, "Four people" (made up). Maya just finished school and is looking for a first job. Leo's mill closed for good and his machine skills are not wanted nearby. Ana was laid off when orders fell in a recession and expects to be rehired when sales return. Pat wants a job but stopped looking 8 months ago, sure none is out there.

7. 4.

   Kira reads card C. Which kind of unemployment is Maya's, and why?

   • Structural: her skills do not match the jobs, since she has had no job yet
   • Neither: she is not counted, since she holds no job yet
   • Cyclical: she has no job, so the economy must be weak at this time
   • Frictional: she is entering the job market and needs time to find a match
8. 5.

   Milo reads card C. Which kind of unemployment is Ana's, and why?

   • Frictional: she is looking for a new job, so her search takes time to finish
   • Not any kind: she expects a recall, so she is not counted as unemployed
   • Cyclical: she lost her job when a recession cut orders and expects to be rehired
   • Structural: her factory skills are not wanted, so she will need to retrain first
9. 6.

   Noah reads cards B and C. How does the BLS count Pat, who stopped looking 8 months ago?

   • Not unemployed: Pat has not looked in the past 4 weeks, so Pat is outside the labor force
   • Employed: someone who stopped looking is counted as holding a job
   • Unemployed: Pat has no job and wants one, so Pat is counted in the unemployment rate
   • Unemployed: Pat looked for work in the past 8 months, so the 4-week test is met in full

10. Use this

    The unemployment rate is the unemployed divided by the labor force. The participation rate is the labor force divided by people aged 16 and over.

12. 7.

    Pia compares the two towns. Which statement is right?

    • Lake Ridge has the higher rate, since it has fewer people outside the labor force
    • Pine Hill has the higher rate because 500 is more than 300 unemployed people
    • The two towns have the same rate, since each has a few hundred unemployed people
    • Pine Hill's rate is higher, about 5.3 percent against 4.8 percent for Lake Ridge
13. 8.

    Ren finds the participation rate in each town. Which statement is right?

    Use the picture in question 7.

    • Pine Hill's is higher, since it has more people outside the labor force
    • They are equal, since each town has a labor force of several thousand people
    • Pine Hill's is higher, since it has more people working or looking for work
    • Lake Ridge's is higher, about 79 percent against about 68 percent in Pine Hill
14. 9.

    A caller says Lake Ridge's job market is healthier, since its unemployment rate is lower and its participation is higher. Tala tests the claim. What is the verdict?

    Use the picture in question 7.

    • Not usable: rates from towns of different size cannot be compared
    • Consistent with the table, but not proof: towns differ in age and other traits the table does not show
    • Proven: lower unemployment and higher participation mean a healthier job market
    • Contradicted: a higher participation rate means more people are looking for jobs and cannot find them
15. 10.

    In Pine Hill 400 of the 4,500 outside the labor force start looking for work. Zee predicts the effect. Which is best?

    Use the picture in question 7.

    • The unemployment rate falls, since more people in the town are now trying to find work
    • Both rates rise: the labor force grows by 400, and the 400 count as unemployed
    • Just participation rises, since the 400 are looking and so they are not unemployed
    • Neither rate changes, since the 400 people did not have a job before or after