Describe the difference between the employment rate and the labor force participation rate (LFPR). Under what circumstance would the two be equal to one another?


The employment rate is a measure of the percentage of the civilian noninstitutional population that is employed and is calculated by taking the number of people employed and dividing by the civilian noninstitutional population. The LFPR is a measure of the percentage of the civilian noninstitutional population that is in the civilian labor force and is calculated by taking the number of people in the labor force (which includes both the employed and the unemployed) and dividing by the civilian noninstitutional population. Therefore, the difference between the two is that the LFPR includes both the employed and the unemployed, while the employment rate only includes the people who are employed. The only way that the employment rate and the LFPR would be equal to one another would be for there to be no unemployed workers.

Economics

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