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Definition – What is the labor force participation rate?
The labor force participation rate is the percentage of people who are in the labor force (number of employed and unemployed) at a given time out of all people in the population.
Formula – How to calculate the labor force participation rate
Labor Force Participation Rate = Labor Force / Working Age Non-Institutionalized Population
Labor Force is the number of employed + the number of unemployed.
Example
A country has 400,000 employed, 100,000 unemployed, and a working age non-institutionalized population of 550,000.
Labor Force Participation Rate = (400,000 + 100,000) / 550,000 = 500,000 / 550,000 = 0.9090
Therefore, the Labor Force Participation Rate is 0.9090 or 90.90%.
Sources and more resources
- Wikipedia – Unemployment (Labor Force Participation Rate) – Wikipedia’s entry on the labor force participation rate, and how it has changed over the years.
- OECD Data – Labour Force Participation Rate – Data by country on the worldwide labor force participation rate.
- The World Bank Data – Labor force participation rate – Information on the worldwide labor force participation rate as well as country-specific data.
- St. Louis Federal Reserve Economic Data – Civilian Labor Force Participation Rate – Data on the U.S. labor force participation rate.