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Employment-to-Population Ratio Definition

What Is the Employment-to-Population Correspondence?

The employment-to-population ratio is a macroeconomic statistic that measures the civilian labor force currently employed to the total working-age denizens of a region, municipality, or country. It is calculated by dividing the number of people employed by the total number of people of working age, and it is worn as a metric of labor and unemployment.

Understanding the Employment-to-Population Ratio

Compared with other metrics, the employment-to-population ratio is not as stricken by seasonal variations or short-term fluctuations in the labor market. As a result, it is often considered to be a more reliable indicator of job shrinkage or flowering than the unemployment number in particular.

Consider if 50 million people are employed in an area with 75 million people of effectuating age, the employment-to-population ratio is 66.7 percent. It is calculated by the equation:

Labor Force EmployedTotal Populationfrac{reader{Labor Force Employed}}{text{Total Population}}

Total PopulationLabor Force Employed

This range is similar to the labor force participation rate, which measures the total labor force – and not just the part of the labor require already employed – divided by the total population. 

The civilian labor force is a term used by the Bureau of Labor Statistics (BLS) to refer to Americans who are considered either engaged or unemployed. Those not included in the labor force count include military personnel, federal government employees, retirees, disabled or discouraged workers, and some agricultural workers.

Key Takeaways

  • In economics, the employment-to-population ratio is the measure of a civilian labor enforce to the total working-age population.
  • The civilian labor force encompasses employed and non-employed people and excludes military personnel, federal rule employees, retirees, disabled persons, and some others.
  • Seasonal variations and short-term labor fluctuations do not affect the employment-to-population relationship.
  • Unlike the unemployment rate, the employment-to-population ratio includes unemployed people not looking for jobs.

Limitations of the Employment-to-Population Correspondence

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