What is the Participation Rate?

Participation Rate Formula

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Example

Based on some research, the US non-institutionalized population in December 2015 calculated the labor force statistics. As a result, the following information was given:

Solution

  • Employed persons: 140000 thousandUnemployed persons: 12000 thousandNon-institutionalised population: 250000 thousand

Calculation of Labour Force is as follows –

  • =140000+12000=152000

Calculation can be done as follows,

  • =(140000+12000)/250000

Example #2

Based on some research, the US non-institutionalized population in September 2014 calculates the labor force statistics. As a result, the following information was given:

  • Employed persons: 240000 thousandUnemployed persons: 11000 thousandNon-institutionalised population: 450000 thousand

  • =11000+240000=251000

  • =(240000+11000)/450000

Calculator

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Relevance and Use

  • It helps in understanding the economic status of the country.It helps in understanding the employment and unemployment comparison of the country.At the time of recession, the participation rate will be very less because, at that time, economic activities will be very low where there are losses for companies that provide less employment to the citizens, which leads to a low rate.

This has been a guide to a participation rate and its definition. Here we discuss the formula for calculation of participation rate, practical examples and a downloadable excel template. You can learn more from the following articles –

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  • read moreCyclical UnemploymentCyclical UnemploymentCyclical unemployment is one of the types of unemployment, which usually happens during the contraction phase of the business cycle where the unemployment rate starts rising as businesses start laying off its employees during the recession period & unemployment rate decreases during the expansionary phase of the business cycle.read moreSeasonal UnemploymentSeasonal UnemploymentSeasonal unemployment refers to when the demand for labor or workforce is lower than normal under certain conditions.read moreCalculate Unemployment RateCalculate Unemployment RateThe unemployment rate formula calculates the share of people who are not working or are jobless of the total employed or unemployed labour force and is depicted as a percentage.
  • Unemployment Rate = Unemployed People / Labor Force * 100
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