Q.69 - The Practice of Statistics for AP

Question

In the language of government statistics, you are “in the labor force” if you are available for work and either working or actively seeking work. The unemployment rate is the proportion of the labor force (not of the entire population) who are unemployed. Here are data from the Current Population Survey for the civilian population aged $25$ years and over in a recent year. The table entries are counted by thousands of people.

Unemployment ($1.1$) Find the unemployment rate for people with each level of education. How does the unemployment rate change with education? 

Step-by-Step Solution

Answer

From the given information, the required unemployment rates for each level are $0.0852,0.0523,0.0425$ and $0.0272$

Step 1: Given Information

It is given in the question that, 

Step 2: Explanation

To find the unemployment rate for each level, divide the difference between 'in the labor force' and 'employed' by the 'in the labor force' from the data.

The unemployment rate for the people who didn't finish high school

$$\begin{gathered} =\frac{12470-11408}{12470} \\ =\frac{1062}{12470} \\ =0.0852 \end{gathered}$$

The unemployment rate for people who did high school but not college

$$\begin{gathered} =\frac{37834-35857}{37834} \\ =\frac{1977}{37834} \\ =0.0523 \end{gathered}$$

The unemployment rate for people who have less than a bachelor's degree

$$\begin{gathered} =\frac{34439-32977}{34439} \\ =\frac{1462}{34439} \\ =0.0425 \end{gathered}$$

Step 3: Explanation

The unemployment rate of people who are college graduates

$$\begin{gathered} =\frac{40390-39293}{40390} \\ =\frac{1097}{40390} \\ =0.0272 \end{gathered}$$

It is seen that if the highest education is higher, then the unemployment rate becomes lower.