Which of the following is true of the labor force participation rate?
A)When workers become unemployed,the labor force participation rate declines.
B)When the unemployed become discouraged workers,the labor force participation rate declines.
C)When workers do not fully use their skills,the labor force participation rate decreases.
D)Since the 1950s,the labor force participation rate of women has decreased in the United States.
E)The trend toward earlier retirement has increased the labor force participation rate in the United States.

Question

Quizplus · Accepted Answer

The labor force participation rate is the percentage of the working-age population that is in the labor force (either employed or actively seeking employment). When the unemployed become discouraged workers (i.e. they give up looking for work), they are no longer considered part of the labor force, which causes the labor force participation rate to decline. Therefore, option B is true. Option A is incorrect because if workers become unemployed but continue to actively seek employment, they are still part of the labor force and the participation rate would remain the same. Option C is incorrect because the labor force participation rate measures the percentage of working-age population that is in the labor force, regardless of how skilled they are. Option D is incorrect because since the 1950s, the labor force participation rate of women has actually increased in the United States. Option E is incorrect because the trend toward earlier retirement would decrease the labor force participation rate, as fewer people would be actively seeking employment.

Which of the Following Is True of the Labor Force