Labour Force Participation Rate

What is Labour Force Participation Rate?

 

‘Labour Force Participation Rate’ refers to the rate of individuals who are active in the job market, either by working or by looking for work. It indicates the size of the supply of available labour to work against the population of the working age.

 

Usually, the age group between 16 to 65 years of age are considered as the working group, with the exceptions being those who are studying and housewives. The labour force participation rate helps provide an overview of the economy of a country.

 

The labour force participation rate should ideally be rising and this happens when the working population is more than the non-working individuals. Hence, this participation rate as well as unemployment rate is studied together to make the necessary adjustments and reduce the unemployment rate while increasing the labour force participation rate.

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