2016 mock exam 9a

ii. Reform 2 on growth of actual labor force participation rate.

I think this should decrease. Anybody else?

If somebody goes on leave, I take them out of the labor force. They are not working and shouldn’t be counted. So by forcing mandatory leave, this means more people will be out of the work force initially. This means it decreases from the effect of the law.

on a side note, is it possible for you to get full points on a question like this that asks you to choose an option. You select the wrong option, but your reasoning is sound?

Labor force participation is measured by willingness to work. If you stop looking because childcare laws are restrictive, then you’re more likely to stop looking (and would be excluded from the labor force).

It is possible, from what I’ve heard. E.g. in a quant question you could get the wrong answer, but get credit for the correct formula and some correct steps.

I took 2016 today and used the same logic and got it wrong, but the intuition of the correct guideline answer makes sense. Kind of a subjective question in my opinion, but when presented with the correct answer, I do believe that it makes more sense since maternity leave is only temporary in nature, and if one is on paid leave, they are still technically in the workforce, so should still be considered active when it comes to labor force participation. Still seems like the question is a bit of a reach though in making the implication that working mothers will leave the workforce automatically if they don’t have paid leave.