In an economy, 40 million people are employed, 2 million are unemployed, and 8 million are not in the labor force. What is the labor force participation rate?

Question

Quizplus · Accepted Answer

The labor force participation rate is calculated as the labor force divided by the total working-age population (labor force + those not in the labor force) times 100. Here, the labor force is 40 million employed + 2 million unemployed = 42 million. The total working-age population is 42 million (labor force) + 8 million (not in the labor force) = 50 million. Thus, the labor force participation rate is (42 million / 50 million) * 100 = 84 percent.

In an Economy, 40 Million People Are Employed, 2 Million