Answer Happy

Part 2 (1 point) Think of the overall unemployment rate as a weighted average of each age group's unemployment rate. The table below reports each age cohort's labor force share (LFS) and unemployment rate for four years. Year 1970 1985 2000 2015 Labor force share (LFS) 21.6% 20.5 15.8 13.5 16-24 Unemployment rate 11.1% 13.6 9.3 11.6 The overall unemployment rate in 1985 was Labor force share (LFS) 60.9% 66.6 71.1 64.4 25-54 Unemployment rate 3.4% 5.9 3.1 4.5 Labor force share (LFS) 17.5% 12.9 13.1 22.1 % (give your answer to one decimal place). 55+ Unemployment rate 2.9% 4.1 See Hint 2.6 3.8 Part 3 (1 point) Look back at the table and notice what has happened to the labor force shares of younger and older workers from 1970 to 2015. The share of younger workers has steadily fallen while the share of older workers has steadily risen. Suppose this trend continues. All else being equal, this would naturally lead to unemployment rate. See Hint