00:01
So here we're talking about unemployment, right? and we need to know the unemployment rate.
00:05
The unemployment rate is equal to the number of people unemployed over the number of people in the labor force, right? lf is equal to the labor force.
00:15
And the labor force is equal to the number of people who are unemployed plus the number of people who are employed, the number of people who have a job, right? so for a, we are told that the participation rate decreases, right? so let's try to think through this.
00:31
Participation is equal to the number of people in the labor force over the number of people in the, what we would call the 15 plus or the 16 plus population, depending on which country you're in.
00:47
So here, if this is going down, we know that this has to be the same.
00:53
But we also are given information about the unemployment rate, right? the employment rate is the number of people who are employed over the number of people in the 15 plus.
01:04
And this is flat.
01:06
So here, we know that labor force is decreasing, but unemployment is constant.
01:13
That means the unemployed has to be decreasing, right? the only way the labor force can be shrinking if the employed are shrinking, sorry, the only way the labor force can be shrinking if the employed are constant is that the ranks of the unemployed have to be shrinking.
01:27
So if we now go back to the unemployment rate, which is the number of unemployed over the number of unemployed plus the number of employed, this is going down, this is going down.
01:38
But since it's a bigger effect on the top than the bottom of the fraction, this whole thing is going down...