Definition
It excludes many people not working and not looking, such as some retirees, students, caregivers, and discouraged workers.
Political Dictionary
Labor Force
The labor force includes employed people and unemployed people actively seeking work.
Why It Matters
It is the denominator used to calculate the unemployment rate.
How It Works
Household surveys classify people by employment and job-search status.
History
Labor-force statistics became central to modern economic measurement.
Example
A person without a job who has stopped searching is generally outside the labor force.
Common Misconceptions
- The labor force includes every adult.
- Children are included automatically.
- Labor-force participation and unemployment are the same.
Related Terms
- Fiscal Policy
- Monetary Policy
- Inflation
- Economic Growth
- Government Spending
Related Topics
See Also