5.2 Labour Force Indicators
Definitions
- The Labour Force (LF) is the total number of people working or unemployed.
- The Unemployment Rate (UNR) is the percentage of the labour force that is unemployed.
- The Labour Force Participation Rate (LFPR) is the percentage of the working-age population that is in the labour force.
- The Employment Population Ratio (EPR) is the percentage of the working-age population (WAP) that is employed or has some form of paid work.
The formulae used to calculate the rates and ratio are explained below,
Labour Force Participation Rate
[latex]\begin{align*}\text{LFPR}&=100\times\frac{\text{# in LF}}{\text{WAP}}\\[2ex]&=100\times\frac{\text{Employed}+\text{Unemployed}}{WAP}\end{align*}[/latex]
In January 2022, if the working age population in Canada was 31.11 M, and the labour force was 20 M, therefore,
the labour force participation rate in May 2020 = (20M ÷ 31.11M) × 100 = 64.2 percent.
Unemployment Rate
[latex]\begin{align*}\text{UNR}&=100\times\frac{\text{# Unemployed}}{\text{LF}}\\[2ex]&=100\times\frac{\text{# Unemployed}}{\text{Employed}+\text{Unemployed}}\end{align*}[/latex]
If in January 2022, the number of unemployed people in Canada was 1.36 M, and the labour force was 20 M, therefore,
the unemployment rate in Jan 2022 = (1.36M ÷ 20M) × 100 = 6.8 percent.
Employment-Population Ratio
[latex]\begin{align*}\text{EPR}&=100\times\frac{\text{# Employed}}{WAP}\end{align*}[/latex]
Next, if the number of people employed in Canada in January was 18 M and the working age population was 31.11 M, then
the employment-population ratio in Jan 2022 = (18M ÷ 31.11M) × 100 = 57.8 percent.
Attribution
“5.3 Unemployment” from Principles of Macroeconomics by University of Minnesota is licensed under a CC BY-NC-SA 4.0 International Licence, except where otherwise noted.
“8.1 How Economists Define and Compute Unemployment Rate” from Principles of Macroeconomics 3e by OpenStax-Rice University is licensed under a Creative Commons Attribution 2.0 license except where otherwise noted.
