3. The towns of Sawyer and Thatcher each have a labor force of 1,200 people. In Sawyer, 100 people were unemployed for the entire year, while the rest of the labor force worked continuously. In Thatcher, every member of the labor force was unemployed for 1 month and employed for 11 months. a) What is the average unemployment rate over the year in each of the towns? b) What is the average duration of unemployment spells in each of the towns? c) In which town do you think the costs of unemployment are higher? Formulas: Employed Pop. + Unemployed Pop. = Labor force Labor force + Pop. out of labor force = Working-age(16 to 64) pop. Unemployment rate = Unemployed Pop. / Labor force x 100% Participation rate = Labor force / Working-age pop. x 100%
3. The towns of Sawyer and Thatcher each have a labor force of 1,200 people. In Sawyer, 100 people were unemployed for the entire year, while the rest of the labor force worked continuously. In Thatcher, every member of the labor force was unemployed for 1 month and employed for 11 months.
a) What is the average
b) What is the average duration of unemployment spells in each of the towns?
c) In which town do you think the costs of unemployment are higher?
Formulas:
Employed Pop. + Unemployed Pop. = Labor force
Labor force + Pop. out of labor force = Working-age(16 to 64) pop.
Unemployment rate = Unemployed Pop. / Labor force x 100%
Participation rate = Labor force / Working-age pop. x 100%
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