Answer to Question #66933 in Macroeconomics for Ezekiel Eruaga

Question

Define income per capita, output per worker and the dependency ratio
and explain the relation between them.
(b) Use your answer to part a) to explain why governments are interested
in increasing both the fertility rate and the female labour force
participation ratio.
(c) Explain paternity leave. Now use your answer to part b) to provide a
rational for the European Union implementing a two-week paternity
leave in 2010.

Answer 1

Income per capita is total average income (usually GDP) per person.
Output per worker is the average amount of total output divided by the number of emloyed workers.
Dependency ratio is is an age-population ratio of those typically not in the labor force (the dependent part ages 0 to 14 and 65+) and those typically in the labor force (the productive part ages 15 to 64).
(b) Governments are interested in increasing both the fertility rate and the female labour force participation ratio, because it will cause both the increase in population growth rate and employment.
(c) Paternity leave is possibility for fathers to to have paid vacation to sit with children.