(1) Does education pay? Do people with higher educational attainment typically earn higher
incomes? Are they less likely to be unemployed? For more information on the relationship between
educational attainment, median income, and unemployment rates, you may use this BLS webpage:
https://www.bls.gov/careeroutlook/2016/data-on-display/education-matters.htm (Links to an
external site.)or find other sources. Make sure to cite any sources used.
(2) What about a person who has given-up looking for a job? Is that person “unemployed”? The BLS
definition says no. (That person is instead classified as “not in the labor force.”) What do you think?
Should such people be counted as unemployed? Explain.
(3) Does unemployment compensation increase unemployment? Between 2008 and 2010 federal
laws extended eligibility for unemployment compensation for up to 99 weeks in states with
persistently high unemployment rates. Some argue that longer eligibility for unemployment
compensation may, in fact, discourage people from seriously seeking employment. Do you agree or
disagree? Explain why.
(4) Which of these alternative measurements of unemployment do you think is the most
meaningful measurement of unemployment in the economy? Explain why
Sample Solution
