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17 January, 17:21

The following information is given for an economy: Labor Force of an Economy Number of People (millions) Total population 35.4 Children under the age of 16 6.7 Retirees 6.6 Employed 18.5 Unemployed 1.9 Not actively seeking employment 1.2 Homemakers 0.5 Instructions: Round your answers to one decimal place. a. How much of the population is older than 16? million b. What is the size of the labor force? million c. What is the labor force participation rate? %

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  1. 17 January, 21:20
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    The answers are:

    a. 28.7 million

    b. 22.1 million

    c. 83.7%

    Explanation:

    First let us list out the details of the population

    Total population = 35.4 million

    Children < 16 years = 6.7 million

    Retirees = 6.6 million

    Employed = 18.5 million

    Unemployed = 1.9 million

    Non-active job seekers = 1.2 million

    Home makers = 0.5 million

    a. For the number of people older than 16, we subtract the number of children less than 16 years from the total population, and that is calculated as;

    Number of population older than 16 years = Total population - Children < 16

    = 35.4 - 6.7 = 28.7 million

    another way of calculating this is to sum all the other people in the population except the children < 16

    b. The labor force of a population are the total number of people who are able to work, that is both the employed and the non-employed people in a population. It is the general pool of employable labor, in this case, excluding the retirees. Therefore the labor force in this case include; employed + unemployed + non-active job seekers + home makers, hence the labor force is calculated as;

    Labor force (in millions) = 18.5 + 1.9 + 1.2 + 0.5 = 22.1 million

    c. The labor force participation rate is the ratio of the number of persons in a population able to work (labor force), and those that are actively employed. It can also be expressed in percentage. It is calculated thus;

    Labor force = 22.1 million

    employed = 18.5 million

    Therefore, Labor force participation rate (in millions) = (Employed persons : Labor force) * 100

    = (18.5 : 22.1) * 100

    = 0.8371 * 100 = 83.7 % (to one decimal place).

    Note that the home makers are those people that do not work for economic benefits but stay at home and their work is centered around their home and family, excluding those who do menial house jobs for money, for example house wives and stay-at-home mothers, so they are not counted among the active labor force. T
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