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BLS CASE: UNEMPLOYMENT STUDY

The U.S. Bureau of Labour Statistics publishes a variety of unemployment statistics every month. Included in this report is the number of individuals who are unemployed. For the month of November 1998, the bureau reported that the national mean length time of unemployment was 14.6 weeks. A sample of 50 unemployed residents of Philadelphia was chosen in the study. Included in the data are their ages and number of weeks unemployed. Summary of the Sample Data Sample Size (Unemployed) Mean Age of Unemployed Standard Deviation (Age) Mean Number of Weeks Unemployed Standard Deviation (Weeks) Correlation Coefficient 50 36.60 11.95 15.54 9.93 0.659 = Positive Strong Correlation

Mean Age of Unemployed Individuals in Philadelphia With the sample data collected, the mean age of unemployed individuals in Philadelphia was estimated using T-distribution due to the absence of the population standard deviation. With a 95% confidence, the lower end of the estimate was computed as 33.2 while the upper end was computed to be 40 (See Appendix for the detailed computations). Duration of Unemployment in Philadelphia According to the report of the U.S. Bureau of Labour Statistics, the mean duration of unemployment in Philadelphia should be less than or equal to 14.6 weeks. However, there is belief that this is not the case; they believe that the mean duration of unemployment in Philadelphia is greater than 14.6 weeks. Hypothesis test: Ho: Ha: The rejection region using the critical value approach with a 0.01 level of significance is determined to be if the t-value of the sample is greater than 2.01, we reject the null hypothesis. To determine the t-value of the sample:





Since t = 0.67 is less than 2.01, we do not reject Ho. Therefore, we say that there is enough statistical evidence to show that the mean duration of unemployment in

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