Employment-To-Population Ratio

Published Mar 20, 2023

Definition of Employment-to-Population Ratio

The employment-to-population ratio (EPOP) is a ratio that measures the percentage of a population that is employed. The ratio is calculated by dividing the number of employed individuals by the total working-age population.

Example

Suppose a country has a population of 100 million, out of which 70 million are of working age (between 18 and 64 years old). If 50 million of these working-age individuals have a job, then the country’s EPOP would be 71.4% (50 million employed divided by 70 million working-age individuals multiplied by 100).

It is important to note that the EPOP does not take into account individuals who are not in the labor force, such as retirees, students, or those who have given up on finding a job. Additionally, the EPOP does not provide information about the quality of jobs or the wages earned by employed individuals.

Why Employment-to-Population Ratio Matters

The EPOP is an important indicator of a country’s labor market conditions. A high EPOP generally indicates a strong labor market, meaning that a higher percentage of the population is employed and contributing to the economy. This can lead to higher economic growth and overall prosperity.

On the other hand, a low EPOP can indicate weaker labor market conditions, which can lead to higher unemployment rates and a lower standard of living. Policymakers and economists often use the EPOP to assess the effectiveness of government policies and programs aimed at increasing employment, such as job training programs or tax incentives for job creation.