Need up to 30 seconds to load.
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
the video subscribing to the channel and
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
[Music]
