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Labor force participation rate

Another important statistic is the labor force participation rate    . This is the percentage of adults in an economy who are either employed or who are unemployed and looking for a job. So, using the data in [link] and [link] , those included in this calculation would be the 157 million individuals in the labor force. The rate is calculated by taking the number of people in the labor force, that is, the number employed and the number unemployed, divided by the total adult population and multiplying by 100 to get the percentage. For the data from February 2015, the labor force participation rate is 62.8%. Historically, the civilian labor force participation rate in the United States climbed beginning in the 1960s as women increasingly entered the workforce, and it peaked at around 68% in late 1999 to early 2000. Since then, the labor force participation rate has steadily declined.

The establishment payroll survey

When the unemployment report comes out each month, the Bureau of Labor Statistics (BLS) also reports on the number of jobs created—which comes from the establishment payroll survey. The payroll survey is based on a survey of about 140,000 businesses and government agencies throughout the United States. It generates payroll employment estimates by the following criteria: all employees, average weekly hours worked, and average hourly, weekly, and overtime earnings. One of the criticisms of this survey is that it does not count the self-employed. It also does not make a distinction between new, minimum wage, part time or temporary jobs and full time jobs with “decent” pay.

How is the u.s. unemployment data collected?

The unemployment rate announced by the U.S. Bureau of Labor Statistics each month is based on the Current Population Survey (CPS), which has been carried out every month since 1940. Great care is taken to make this survey representative of the country as a whole. The country is first divided into 3,137 areas. The U.S. Bureau of the Census then selects 729 of these areas to survey. The 729 areas are then divided into districts of about 300 households each, and each district is divided into clusters of about four dwelling units. Every month, Census Bureau employees call about 15,000 of the four-household clusters, for a total of 60,000 households. Households are interviewed for four consecutive months, then rotated out of the survey for eight months, and then interviewed again for the same four months the following year, before leaving the sample permanently.

Based on this survey, unemployment rates are calculated by state, industry, urban and rural areas, gender, age, race or ethnicity, and level of education. A wide variety of other information is available, too. For example, how long have people been unemployed? Did they become unemployed because they quit, or were laid off, or their employer went out of business? Is the unemployed person the only wage earner in the family? The Current Population Survey is a treasure trove of information about employment and unemployment. If you are wondering what the difference is between the CPS and EPS, read the following Clear it Up feature.

What is the difference between cps and eps?

The Current Population Survey (CPS) conducted by the United States Census Bureau measures the percentage of the labor force that is unemployed. The establishment payroll survey (EPS) by the Bureau of Labor Statistics is a payroll survey that measures the net change in jobs created for the month.

Criticisms of measuring unemployment

There are always complications in measuring the number of unemployed. For example, what about people who do not have jobs and would be available to work, but have gotten discouraged at the lack of available jobs in their area and stopped looking? Such people, and their families, may be suffering the pains of unemployment. But the survey counts them as out of the labor force because they are not actively looking for work. Other people may tell the Census Bureau that they are ready to work and looking for a job but, truly, they are not that eager to work and are not looking very hard at all. They are counted as unemployed, although they might more accurately be classified as out of the labor force. Still other people may have a job, perhaps doing something like yard work, child care, or cleaning houses, but are not reporting the income earned to the tax authorities. They may report being unemployed, when they actually are working.

Although the unemployment rate gets most of the public and media attention, economic researchers at the Bureau of Labor Statistics publish a wide array of surveys and reports that try to measure these kinds of issues and to develop a more nuanced and complete view of the labor market. It is not exactly a hot news flash that economic statistics are imperfect. Even imperfect measures like the unemployment rate, however, can still be quite informative, when interpreted knowledgeably and sensibly.

Click here to learn more about the CPS to read frequently asked questions about employment and labor.

Key concepts and summary

Unemployment imposes high costs. Unemployed individuals suffer from loss of income and from stress. An economy with high unemployment suffers an opportunity cost of unused resources. The adult population can be divided into those in the labor force and those out of the labor force. In turn, those in the labor force are divided into employed and unemployed. A person without a job must be willing and able to work and actively looking for work to be counted as unemployed; otherwise, a person without a job is counted as being out of the labor force. The unemployment rate is defined as the number of unemployed persons divided by the number of persons in the labor force (not the overall adult population). The Current Population Survey (CPS) conducted by the United States Census Bureau measures the percentage of the labor force that is unemployed. The establishment payroll survey by the Bureau of Labor Statistics measures the net change in jobs created for the month.


A country with a population of eight million adults has five million employed, 500,000 unemployed, and the rest of the adult population is out of the labor force. What’s the unemployment rate? What share of population is in the labor force? Sketch a pie chart that divides the adult population into these three groups.

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Questions & Answers

what's marginal utility?
Abena Reply
the additional utility you get if you can consume one more unit of the good x
Thanks... then what's the law of diminishing marginal utility ?
The utility decreases with every unit you consume (most of the time). The first unit of consumption will therefore give you the highest utility. Sorry about my english
Okay... I understand now
What is economies of scale
Jeremiah Reply
In microeconomics, economies of scale are the sum of total costs saved or that a firm has advantage over its competitors due to its scale of operations. More specifically, it is the firm's cost savings per unit of output that it gains as its production increases in scale.
one of the leading industrial nations of the world ranking second in manufacturing output after the USA is ......... a. Russia b. Germany c. Britain d. Japan
what is supply of demand?
Joseph Reply
supply of demand?
1)importance of internal trade. 2) international trade barriers 3) principles of international trade
umar Reply
how can tell me about the GDP
explain the basic economic concept using ppc ?
Nurul Reply
scarcity can be represented by imagining a country producing only 2 goods and the resources to do so are fixed, hence a choice must be made and how to divide the limited resources between the two goods. you can choose any combination of the two goods that fall directly on the curve which represents
maximum efficiency and the highest possible output at this point in time. if you choose to not utilize all the resources then you will be inefficient (not to your best ability) and produce below the curve. however if you have increases in technology or find new resources you can shift the curve out
Please what is meant by resources allocation
albert Reply
Please I need explanation about resources allocation
what is cost
Mohit Reply
Cost:-is the sacrifice or measured price paid to acquire, produce or maintain a good or service
To what extend is labour, capital, land and entrepreneur considered as free good
#what is public finance
Ryan Reply
public finance is the study of how the government generates and spends to facilitate the day to day operations. simply put its an analysis of the income/expenditure statement of the government and how it affects welfare
#kk fenks
you say it all
what is economic model
chantal Reply
it may differ as different economist model ,but as to me it is a formal presentation of economic theory.
what are the factors affecting utility
compare the ways in which resources are allocated in market and command economies
stella Reply
is profit maximization the only6 objective of private sectors
Alain Reply
it's so difference way
pls can u guys tell me y it not....
there is equally prestige, sales managment, to solve unemployment, to maximize capacity
"in the private sector profit maximization is the main but not the only goal of the firm"discuss pls
what is the difference between a co-operative and joint stock copany
a join stock company is one in which there is a large number of shareholders who provide the capital in varrying proportion while a cooperative society is a non profit making organization that is owned and directly control by it member.example are producers cooperative...
thank Alain Aji
Another one what Is Nationalisation
Nationalization is the process of transforming private assets into public assets by bringing them under the public ownership of a national government or state
that's right thanks
and what is Nationalised industry
what are the principle of governing a cooperative
these are business organizations,which were created by individuals but taken over by the government.
i agree your opinion
What's National income
reduction of risk also
why is economics different from pure science...
Jacque Reply
it's because the methodology is scientific in nature,for example we have economics in geography,history,but with pure science it deal with the nature..
science uses logic to study and systematic method and economic uses practical methods to deal with d current economic scenario
but it is said in general that it is a science ...why?
because it only deals with human behavior
Economics is a science since it use some scientific methods but not as pure science that's why it's refers as social science
Mister Kay. Economics is a (Social) Science. It deals with human beings and uses a systematic and logical body of theories, laws and assumptions to study and interpret human behaviour in the face of choice making in an environment where resources are naturally scarce, insufficient or unavailable.
economics is considered different from the pure sciences such as chemistry and physics for the simple fact that it can't be isolated in a lab or test tube and studied. in economics we can't control all the variables and study the effect of the outcome of tweaking just one variable.
hence it's not a perfect science. to make up for this we use the assumption of ceterius paribus or holding all else constant. In the real world it's dynamic and we can't isolate for eg a change in income on demand holding all else constant (prices of goods, etc)
What is the relationship between quantity demanded and quantity supplied at equilibrium? What is the relationship when there is a shortage? What is the relationship when there is a surplus?
Sualihu Reply
When QS greater than QD, it costed the price to drop
equilibrium is the market price
at equilibrium, demand meets supply, thus a right price , good enough to ensure no waste of supply or shortage of demand
The relationship between quantity demanded and quantity supplied at equilibrium is that there is satisfaction between supply and demand. Prices increases when there is increased in demand and vice versa.
what is expenditure of consumer
Patrick Reply
Consumer spending, consumption, or consumption expenditure is the acquisition of goods and services by individuals or families. It is the largest part of aggregate demand at the macroeconomic level. There are two components of consumer spending: induced consumption and autonomous consumption. ...
found this hope it helps. :)
how can we calculate price elasticity
okey thank you
How can we calculate price elasticity?
% change in qty demand over % change in price
the volume of people who are willing and able to pay for a good or a service
Shadreck Reply

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Source:  OpenStax, Principles of economics. OpenStax CNX. Sep 19, 2014 Download for free at http://legacy.cnx.org/content/col11613/1.11
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