Labour Force Participation Rate Calculator
Calculate the percentage of the civilian noninstitutional population that is in the labour force.
Results
What is the Labour Force Participation Rate?
The Labour Force Participation Rate (LFPR) is a critical economic metric that measures the proportion of a country's working-age population that is either currently employed or actively seeking employment. Unlike the unemployment rate, which only looks at those already in the labor market, the LFPR provides a broader view of how many people are willing and able to contribute to the economy.
The Formula
To calculate the participation rate, we use the following mathematical formula:
LFPR = (Labour Force / Civilian Noninstitutional Population) × 100
Where:
- Labour Force: The sum of all employed persons and all unemployed persons who are actively looking for work.
- Civilian Noninstitutional Population: Individuals aged 16 and older who are not in the military and are not inmates of institutions (such as prisons or mental health facilities).
Real-World Example
Imagine a small economy with the following demographics:
- Employed: 95,000 people
- Unemployed (searching): 5,000 people
- Total Population (16+): 150,000 people
Step 1: Calculate the total Labour Force (95,000 + 5,000 = 100,000).
Step 2: Divide the Labour Force by the total Population (100,000 / 150,000 = 0.666).
Step 3: Multiply by 100 to get the percentage (66.7%).
Why Does LFPR Matter?
Economists track this rate to understand shifts in the economy. A declining LFPR can indicate an aging population, more people pursuing higher education, or "discouraged workers" who have stopped looking for jobs because they believe none are available. Conversely, a rising rate suggests a growing economy with more opportunities drawing people into the workforce.