Answer to Question #170461 in Microeconomics for madisyn bryant

Question

Mr. Smith was disabled in a car accident in 1995 and has not been able to work since. Is Mr. Smith included in the unemployment statistics? Why or why not?

Answer 1

Solution:

Mr. Smith is not included in the unemployment statistics.

Unemployment occurs when people in the labor force who are available and looking for work are unable to find employment. However, people who have not looked for work in the past four weeks are not included in the unemployment statistics. The Bureau of labor statistics does not count everyone who is jobless as unemployed, it excludes those who have not searched for work within the past four weeks and removes them from the labor force, which includes both the employed and unemployed. This list also includes people with a disability that keeps them from working and people who would like to work but are not actively searching for any work.

Therefore, Mr. Smith cannot be included in the unemployment statistics since his disability has prevented him from working since 1995. He has also been removed from the labor force since he is inactive and cannot look for any job.