Some people are counted as out of the labour force because they have made no serious or recent effort to look for work. However, some of these people may want to work even though they are too discouraged to make a serious effort. If these persons were counted as unemployed instead of out of the labour force, how would the labour statistics change?
A) The unemployment rate and the labour-force participation rate would be higher.
B) The unemployment rate would be higher, and the labour-force participation rate would be lower.
C) The unemployment rate would be lower, and the labour-force participation rate would be higher.
D) The unemployment rate and the labour-force participation rate would be lower.

Question

Quizplus · Accepted Answer

Including discouraged workers as unemployed would increase the number of people counted as part of the labor force (those actively seeking work plus the unemployed), thus raising both the unemployment rate (since more people are considered without work but seeking employment) and the labor-force participation rate (since more people are counted as either working or seeking work).

Some People Are Counted as Out of the Labour Force