Labour force
About the calculation
The labour force refers to the number of people in an economy who are participating in the labour market. There are two groups that are participating in the labour market, which are:
- those employed - that is working one or more hours per week
- those unemployed - that is, not working one or more hours a week and actively seeking work
Adding together these two groups provides the numbers of persons in the labour force in a given economy.
Labour force = persons unemployed + persons employed
How is it examined?
Typically questions are not asked to calculate the labour force alone (it may be used as a component of an unemployment calculation). However, questions are asked about whether the labour force would increase, or decrease, if certain changes occur in the labour market.
What students get wrong
Common errors include:
- thinking part time or casual workers are not in the labour force
- thinking unemployed persons are not in the labour force
- thinking underemployed persons (those with a job but wanting more hours) are not in the labour force
- thinking that hidden unemployed (those who have given up actively seeking work) are in the labour force