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 are shown 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 Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, 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.
