June 19, 2018 

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Because the employment-population ratio is the ratio of employment to population, it does not suffer from underestimation problems attributable to discouraged workers and other unemployed persons that enter and exit the labor force. In particular, the unemployment rate goes up and down as people enter and exit the labor force, even though these folks have no affect on employment and production. When discouraged workers leave the labor force, the unemployment rate goes down, but the employment-population ratio does not change. When high school and college students seek jobs during the summer months, the unemployment rate goes up, even though the employment-population ratio does not change.

The calculation of the employment-population ratio is illustrated using this equation:

employment-population ratio=employed
total noninstitutionalized
civilian population
x 100

Suppose that the total noninstitutionalized civilian population is 206,000 people and the number of employed persons is 133,000. The employment-population ratio is calculated as:

employment-population ratio=133,000
x 100=64.6%

The employment-population ratio is closely associated with the labor force participation rate. The labor force participation rate is the ratio of the sum of both employed and unemployed to the total noninstitutionalized civilian population. The employment-population ratio is simply the ratio of employed persons to the total noninstitutionalized civilian population.

The connection between the employment-population ratio and labor force participation rate is also noted by the general upward trend in the employment-population ratio. In the late 1940s, the employment-population ratio was in the mid-50 percent range. By the late 1990s, this rate had gradually risen to the mid-60 percent range. Much of this increase can be attributed to the increased participation of women in the labor force, which resulted from a change in the traditional role of women as housewives, stay-at-home mothers, and homemakers. The end result is that the economy has found employment for a larger fraction of the population, resulting in an increase in total production.

The employment-population ratio is also closely connected to what is termed the dependency ratio, which indicates the degree to which the entire population depends on those actively engaged in production. When the employment-population ratio increases, society has more people working and producing and thus fewer dependents not working and producing. The burden placed on each provider is less when more people do the providing.


Recommended Citation:

EMPLOYMENT-POPULATION RATIO, AmosWEB Encyclonomic WEB*pedia,, AmosWEB LLC, 2000-2018. [Accessed: June 19, 2018].

Check Out These Related Terms...

     | unemployment rate | Current Population Survey | Bureau of Labor Statistics | labor force | civilian labor force | employment rate | labor force participation rate | unemployment rate, measurement problems | alternative unemployment rate | employed persons | unemployed persons | not in the labor force |

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