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hey everyone and welcome back to the

channel in this video we'll be learning

how to calculate the labor force

participation rate the unemployment and

the employment rate with that said let's

get into it

what better data to use than the actual

data from the labor force survey

collected by statistics Canada and

released to US December 2nd 2022. so the

key information that we're looking at is

the population Labor Force employment

and unemployment Rose we want the most

recent data so we're looking at November

of 2022 as these are the official

numbers for Canada so let's take the

data that we want to use and then

calculate these key pieces of

information so now I've collected all of

my data from November of 2022. now the

population it's worth noting is the

population age 15 plus this is known as

the working age population in Canada the

labor force is the sum of all employed

and unemployed people now you'll notice

all of these numbers are in terms of

thousands if you took these numbers and

multiplied them all by 1000 that would

give you the actual values so know the

working age population of Canada is not

31

964.7 but rather 31.96 million just

thought I'd mention that in case any of

you thought that Canada was just an

abnormally small country so the three

rates that we're calculating today are

the unemployment rate the labor force

participation rate and the employment

rate now these are the three rates that

you will be expected to calculate in an

introductory macroeconomics course so

the formulas for these are as follows

the unemployment rate is equal to the

number of people unemployed divided by

the number of people in the labor force

times 100 because we want it to be a

percentage

the labor force participation rate is

equal to the number of people in the

labor force divided by the total working

age population times 100 again we want a

percentage and then finally the

employment rate is the number of people

employed divided by the working age

population now it's important to note

that the denominator of the unemployment

rate is the number of people in the

labor force but the denominator of the

employment rate is the total number of

people in the working age population and

so therefore the unemployment rate plus

the employment rate will not sum to one

I just wanted to make that distinction

because that's an area I see a lot of

students mess up so we have all of the

information we need to calculate these

so let's get started for the

unemployment rate we have the total

number of people unemployed which is

1049.6 remember this is in terms of

thousands

divided by the total labor force which

is 20

715.9 this gives me a decimal value of

0.0507 and of course I would multiply

that by 100 because I want it as a

percentage and that gives me 5.1 percent

for the labor force participation rate I

have my labor force which is 20

715.9 divided by the total working age

population which is thirty one thousand

nine hundred and sixty four point seven

this is going to give me a decimal value

of

0.6481 which multiplied by 100 to turn

it into a percentage is going to give me

64.8 percent finally we have the

employment rate which remember is the

number of people employed divided by the

working age population that gives me 19

666.3 divided by 31 964.7

that gives me a decimal value of

0.6153 and of course multiplying by 100

to get myself a percentage 61.5 now

going back and checking the labor force

survey data all three of these rates

that you calculated perfectly match the

rates determined by the statistics

Canada and there you have it it's as

simple as that once again remember that

the denominator for the unemployment

rate is not the same as the denominator

for the employment rate again that's the

biggest mistake that students make when

calculating these rates and therefore

the unemployment rate and the Implement

rate do not sum to 100 as you can

clearly see in the future we plan on

making a video where you're given the

employment rate the labor force

participation rate or the unemployment

rate and then required to reverse

engineer those to give yourself the key

pieces of information that is the

working age population the labor force

the number of people employed and

unemployed so let us know in the comment

section if that's something you're

interested in and we can prioritize

making a video like that if you found

this video helpful let us know by liking

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of course let us know in the in the

comments section what type of economic

videos you'd like to see us cover in the

future thanks for watching this video

and we'll catch you in the next

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