When an individual quits his job and decides to look for a new job immediately, the labor-force participation rate
A) decreases.
B) increases.
C) stays the same.
D) may increase or decrease, depending on the length of time he/she stays at home.

Question

Quizplus · Accepted Answer

The labor-force participation rate is a measure that reflects the percentage of working-age population that is either employed or actively seeking employment. When an individual quits his job and starts searching for a new job immediately, he/she is still part of the labor force and actively seeking employment. Therefore, the labor-force participation rate remains unchanged. It would only decrease if the individual becomes discouraged and stops looking for work altogether.

When an Individual Quits His Job and Decides to Look