Question

The towns of sawyer and thatcher each have a labor force of 1200 people. in sawyer, 200 people were unemployed for the entire year, while the rest of the labor force was employed continuously. in thatcher, every member of the labor force was unemployed for 2 months and employed for 10 months. instructions: enter your responses rounded to one decimal place.
a. what is the average unemployment rate over the year in each of the two towns? sawyer: %. thatcher: %. instructions: enter your responses as integer values.
b. what is the average duration of unemployment spells in each of the two towns?

Answer 1

Given the labor force of each town = 1200

Unemployed force in Sawyer = 200

Unemployed force in Thatcher =  1200 for 2 months and 0 for 10 months

A) The average unemployment rate over the year in Sawyer =

unemployed/labor force = 200/1200 = 16.66%

The average unemployment rate over the year in Thatcher =  unemployed per month/labor force =$\left [\left ( 2\left ( \frac{1200}{1200} \right ) +10\left (  \frac{0}{1200}\right )\right )  \right ]/12$ = 16.66%

B) Average duration of unemployment in Sawyer = 12 (as every month some of the people are unemployed always)

Average duration of unemployment in Thatcher = 2 (as only for 2 months the entire labor force is unemployed always)