Low Unemployment Rates in Dubai Dubai’s unemployment rate stood at 0.4 percent in 2015, increasing by 0.1 percent from its 0.3 percent level in 2014. Despite this increase, Dubai has one of the lowest unemployment rates in the world. The reasons for this include a high cost of living that reduces frictional unemployment; most jobseekers being based abroad; and expats requiring an employment visa to be able to live in Dubai.

a. Using the information in the news clip, what can you conclude about the labor force participation rate, employment-to-population ratio, and unemployment rate in Dubai?

b. If the government of Dubai relaxed employment visa requirements to make it easier for foreign nationals to seek a job in Dubai, how would the unemployment rate in the news clip change? Why?