Participation Rate

What is the Participation Rate?

Participation Rate indicates the number of people interested in working and the number of people not working indicating the unemployment of the country and indicates the economic active workforce. Higher rate indicates higher number of people interested in working and is an important metric rate to understand the employment and unemployment of the country.

Participation Rate Formula

Participation Rate Formula= Employed People + Unemployed People / Working Age Non-Institutionalized Population
Participation-Rate-Formula

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For eg:
Source: Participation Rate (wallstreetmojo.com)

Example

You can download this Participation Rate Formula Excel Template here – Participation Rate Formula Excel Template

Based on some research US Non-Instituonalized Population in December 2015 to calculate the labour force statistics. The following information was given:

Solution

  • Employed persons: 140000 thousand
  • Unemployed persons: 12000 thousand
  • Non-institutionalised population: 250000 thousand

Calculation of Labour Force is as follows –

Participation Rate Formula Example 1.1
  • =140000+12000
  • =152000

Calculation can be done as follows,

Participation Rate Formula Example 1.2
  • =(140000+12000)/250000
Participation Rate Formula Example 1.3

Example #2

Based on some research Us Non- Instituonalised Population in SEP 2014 to calculate the labour force statistics. The following information was given:

Solution

  • Employed persons: 240000 thousand
  • Unemployed persons: 11000 thousand
  • Non-institutionalised population: 450000 thousand

Calculation of Labour Force is as follows –

Participation Rate Formula Example 2.1
  • =11000+240000
  • =251000

Calculation can be done as follows,

Participation Rate Formula Example 2.2
  • =(240000+11000)/450000
Participation Rate Formula Example 2.3

Calculator

You can use this calculator

Employed People
Unemployed People
Working Age Non-Institunionalized Population
Participation Rate
 

Participation Rate =
Employed People + Unemployed People
Working Age Non-Institunionalized Population
0+0
= 0
0

Relevance and Use

  • It helps in understanding the economic status of the country.
  • It helps in understanding the employment and unemployment comparison of the country.
  • At the time of recession participate rate will be very less because at that time economic activities will be very low where there are losses for companies they provide less employment to the citizens which leads to the low rate.

Recommended Articles

This has been a guide to Participation Rate and its definition. Here we discuss the formula for calculation of participation rate along with practical examples and downloadable excel template. You can learn more from the following articles –

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