*This is a discussion question. Please answer in a discussion format!!

For this week's discussion post, we are going to debate how we measure unemployment, how we measure the active labor force, and we are going to compare basic characteristics of the United States versus the European labor markets.

In general, economists agree that there is a trade off between unemployment and employment benefits, such as health care, paid parental leave, paid vacation, and job stability. There is also an overall agreement that there's a trade off between unemployment and unemployment benefits. However, much less is said about employment benefits, unemployment benefits and how much those impact labor market participation.

Below are two graphs elaborated by economists Zsolt Darvas and David Pichler. The first graph compares employment rates in the United States versus mean employment rates in 28 European Countries. As expected by mainstream theory, the unemployment rates in the United States--a labor market characterized by flexible labor laws, where most employment and unemployment benefits are limited and highly dependent on unionization and regional politics--are generally lower for recent years when compared to the unemployment rates of European countries--which are characterized mostly by strong labor laws, higher rates of unionization, and federally enforced generous employment and unemployment benefits. The second graph, however, shows that, while the labor force participation rate is constantly decreasing for the United States, it shows a constant increase for European countries. Based on these graphs and your own knowledge acquired in this class, why do you think that people in the United States are less and less motivated to enter the labor market, while people in Europe keep joining the labor market at increasing rates? Given the focus on unemployment rates in political and economic debates, do you think that the unemployment rate can be misleading when someone is not aware of other labor market characteristics (such as labor force participation rate, underemployment and rate of discourage workers)?

Labour force participation rate (%% of population] 75 70 71 72 73 74 76 77 78 68 200003 200102 200201 200204 200303 200402 200501 Figure 2: Labour force participation rate (age 15-64, % of population] 200504 200603 EU28 200702 200801 200804 US 200903 201002 201101 201104 201203 201302 201401 201404 201503 201602 201701