Assume that the share of whites in the labor force is 85% and their unemployment rate is 10% and that the share of non-whites in the labor force is 15% and their unemployment rate is 14%.What is the overall unemployment rate?

Question

Quizplus · Accepted Answer

The overall unemployment rate can be calculated by taking a weighted average of the unemployment rates for whites and non-whites based on their share of the labor force. For whites: 85% * 10% = 8.5%. For non-whites: 15% * 14% = 2.1%. Adding these together gives an overall unemployment rate of 10.6%.

Assume That the Share of Whites in the Labor Force