April 2012, the unemployment rate fell from
8.2% to 8.1%, but the number of people in the
labor force decreased by 342,000. Recent declines
in the labor force have had a large effect on the
unemployment rate. An article on USAToday.
com noted that: “If the same percentage of adults
were in the workforce today as when Barack
Obama took office, the unemployment rate
would be 11.1 percent. If the percentage was
where it was when George W. Bush took office,
the unemployment rate would be 13.1 percent.”
a. Why would a decrease in the labor force lead
to a lower unemployment rate?
b. What might cause unemployed workers to
leave the labor force?