Labor Force Participation Rate

Definition

The labor force participation rate represents the percentage of working-age population that is either employed or actively seeking employment.

Analogy

Think about a basketball game where all players are potential job seekers. The labor force participation rate would be like calculating how many players are actually on the court playing versus those who are sitting on the bench or not even at the game.

Related terms

Unemployment Rate: The unemployment rate measures the percentage of people who are actively looking for work but cannot find employment.

Discouraged Workers: Discouraged workers are individuals who have given up searching for employment due to lack of available jobs or other reasons.

Underemployment: Underemployment refers to individuals who work part-time or have jobs that do not fully utilize their skills and qualifications.