Published Dec 31, 2022 The labor force participation rate is a measure of the percentage of the population that is actively participating in the labor force. That means it is calculated as the number of people (aged 16 or older) who are employed or actively looking for work divided by the total working-age population. It is sometimes also referred to as the economic activity rate. To illustrate this, let’s look at the labor force participation rate in the United States. According to the Bureau of Labor Statistics, the participation rate in the US was 62.1% in November 2022 (Source: bls.gov). That means 62.1% of the population aged 16 or older was either employed or actively looking for work. The economic activity rate changes based on social, economic, and even demographic trends among the population. According to the Bureau of Labor Statistics, the US has seen its highest participation rate in April 2000 at 67.3%. After that, it has declined for a few years, before stabilizing in a range between 61% – 63% since (Source: St. Louis FED). The labor force participation rate is an important indicator of the health of an economy. Together with the unemployment rate, it provides insight into the number of people who are actively participating in the labor market and can help to identify potential labor shortages or surpluses. It is also a useful tool for policymakers to assess the impact of economic policies on the labor market. In addition to that, it can be used to measure the effectiveness of job training programs and other initiatives designed to increase employment.Definition of Labor Force Participation Rate
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Why Labor Force Participation Rate Matters
Economics