!Urgent Plz!Calculating the change in labor force and unemployement rate?

Question

Hi, I have a test soon and reading through the mock examples of past tests I see the following type of question that i don't know how to answer can you please help me in understanding how to work this out. Thanks alot.

Participation rate was 60.2% in August and rose to 60.8 in September. The no of people employed was 2,111,222 in August and rose to 2,222,333 in September. The working age population was 3,500,000.

What is the change in labour force and how does one calculate it?

What is the change in the unemployment rate and how does one calculate it?

Thanks alot, can you plz show working.

Answer 1

Your data actually contradicts a bit:

60.2%=0.602

3'500'000*0.602=2'107'000 (Labor force Employed+Unemployed) But you give Employed=2'111'222  (only employed are 60.32% of 3'500'000 plus there should be unemployed)

60.8%=0.608

3'500'000*0.608=2'128'000 (Labor force Employed+Unemployed) But you give Employed=2'222'333 (only employed are 63.5% of 3'500'000 plus there should be unemployed)

Change in labor force (with fixed population and age structure) 0.608-0.602=+0.006 or +0.6% (employed plus unemployed) of 3'500'000

Change in labor force=0.006*3'500'000=+21'000

So:

1) From participation rate and population in working age we can calculate labor force (LF).

2) Knowing currently employed population (E) and labor-force (LF) we can calculate unemployment rate (U)

U=(LF-E)/LF

If we have two periods with different labor force LF1 and LF 2 and also employed workers E1 and E2 we can calculate quantity of unemployed workers for different periods

(LF1-E1)=U1

(LF2-E2)=U2

And unemployment rates:

(LF1-E1)/LF1=U1%

(LF2-E2)/LF2=U2%

Change in unemployed workers ΔU=U2-U1

Change in unemployment rates ΔU%=U2%-U1%=X percentage points.