Labor Force Participation Rate

Definition

The labor force participation rate measures the percentage of working-age population (16 years old and above) who are either employed or actively seeking employment.

Analogy

Imagine you're at a party with 100 people. The labor force participation rate would be like counting how many people at the party are either dancing on the dance floor or actively looking for someone to dance with.

Related terms

Unemployment Rate: The unemployment rate measures the percentage of people in the labor force who are without a job but actively seeking employment.

Underemployment: Underemployment refers to when workers have jobs that do not fully utilize their skills or qualifications, often resulting in lower wages than they could potentially earn.

Discouraged Workers: Discouraged workers are individuals who have given up searching for employment due to lack of available jobs or other reasons. They are not included in official unemployment statistics.