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.

   Ari finds the labor force of Cedar Falls. Which count is it, and why?

   • 6,300: the employed plus the unemployed, since the 3,700 not looking are outside it
   • 6,000: the people with jobs, since the labor force is the group that is working
   • 10,000: each person aged 16 and over, since each of them in the town could take a job
   • 300: the people without jobs, since the labor force is the group that needs work
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, though nobody found a job: the 200 left the labor force
   • 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 because the 200 people found jobs in the town
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
   • 37 percent: 3,700 of 10,000 are outside the labor force, so it shows who takes part
   • 4.8 percent: 300 of 6,300 are without work, so it shows how many people cannot find jobs
   • 63 percent: 6,300 of the 10,000 are working or looking for work

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.

   Luz reads card C. Which kind of unemployment is Leo's, and why?

   • Frictional: any worker who loses a job is between jobs by definition
   • Cyclical: he lost his job because the economy was weak, so he will be rehired
   • Frictional: he is moving between jobs and will find a match in a short time, as most workers do
   • Structural: the mill is gone and his skills are not matched to the jobs nearby
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
   • 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
   • Not any kind: she expects a recall, so she is not counted as unemployed
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
   • Unemployed: Pat looked for work in the past 8 months, so the 4-week test is met in full
   • 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

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's rate is higher, about 5.3 percent against 4.8 percent for Lake Ridge
    • 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
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
    • Lake Ridge's is higher, about 79 percent against about 68 percent in Pine Hill
    • 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
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.

    • Consistent with the table, but not proof: towns differ in age and other traits the table does not show
    • Contradicted: a higher participation rate means more people are looking for jobs and cannot find them
    • Proven: lower unemployment and higher participation mean a healthier job market
    • Not usable: rates from towns of different size cannot be compared
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
    • Neither rate changes, since the 400 people did not have a job before or after
    • 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