In measuring unemployment, which of the following is one reason official unemployment statistics can be unreliable or incomplete?

• A. They typically exclude discouraged workers who have stopped looking for a job and therefore are not counted in the labor force.
• B. They are based on a complete census of every worker each month, which makes the results outdated by the time they are published.
• C. They count retirees and full-time students as unemployed if they are not currently working.
• D. They include all part-time workers as unemployed, even if those workers have jobs.

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the definition of the labor force and unemployment rate. The labor force includes all people who are either employed or actively seeking employment. The unemployment rate is calculated as the number of unemployed people divided by the labor force.
2. Step 2: Recognize that official unemployment statistics typically count only those who are actively looking for work as unemployed. This means people who have stopped looking for work, known as discouraged workers, are not included in the labor force and thus not counted as unemployed.
3. Step 3: Analyze why excluding discouraged workers can make official unemployment statistics unreliable or incomplete. Since discouraged workers want a job but have given up searching, the official rate may understate the true level of unemployment or underutilization of labor.
4. Step 4: Review the other options and understand why they are incorrect: official statistics are not based on a complete census but on surveys; retirees and full-time students are not counted as unemployed if they are not seeking work; part-time workers with jobs are counted as employed, not unemployed.
5. Step 5: Conclude that the key reason for unreliability or incompleteness in official unemployment statistics is the exclusion of discouraged workers who have stopped looking for a job and are therefore not counted in the labor force.