Question

Between January 2012 and January 2019 , U.S. employment increased by 17.3 million workers, but the number of unemployed workers declined by only 6.3 million. How are these numbers consistent with each other? Why might one expect a reduction in the number of people counted as unemployed to be smaller than the increase in the number of people employed?

Name: Problem 4, Chapter 15: Principles of Macroeconomics
Uploaded: 2020-12-18T22:40:09-08:00
Duration: 2 min 10 s
Channel: Natalie Britton
Description: Between January 2012 and January 2019 , U.S. employment increased by 17.3 million workers, but the number of unemployed workers declined by only 6.3 million. How are these numbers consistent with each other? Why might one expect a reduction in the number of people counted as unemployed to be smaller than the increase in the number of people employed?

   Between January 2012 and January 2019 , U.S. employment increased by 17.3 million workers, but the number of unemployed workers declined by only 6.3 million. How are these numbers consistent with each other? Why might one expect a reduction in the number of people counted as unemployed to be smaller than the increase in the number of people employed?

Principles of Macroeconomics

N. Gregory Mankiw 9th Edition

Chapter 15, Problem 4

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Solved by Expert Natalie Britton

12/18/2020

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Between January 2012 and January 2019, U.S. employment increased by 17.3 million workers. This means that 17.3 million more people found jobs during this period. Show more…

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Between January 2012 and January 2019 , U.S. employment increased by 17.3 million workers, but the number of unemployed workers declined by only 6.3 million. How are these numbers consistent with each other? Why might one expect a reduction in the number of people counted as unemployed to be smaller than the increase in the number of people employed?

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Key Concepts

Labor Force Dynamics

This concept refers to the changes in the composition of the labor market, including variations in the number of people actively engaged in job search and those not participating at all. When employment rises significantly, it can be due partly to individuals joining the labor force who may have not been counted as unemployed previously, thereby causing a smaller net decrease in the number of unemployed workers relative to the growth in employment.

Measurement of Unemployment

Unemployment statistics are based on specific criteria, such as actively seeking work and availability to start work, rather than merely the presence or absence of a job. Because the official count excludes individuals not actively looking for work, such as discouraged workers, increases in employment can be much larger than the drop in unemployment figures, making the two seemingly inconsistent but statistically coherent.

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