In economics, a labor force or labour force is a region's combined civilian workforce, including both the employed and unemployed.[1]
Normally, the labor force of a country (or other geographic entity) consists of everyone of working age (typically above a certain age (around 14 to 16) and below retirement (around 65) who are participating workers, that is people actively employed or seeking employment. People not counted include students, retired people, stay-at-home parents, people in prisons or similar institutions, people employed in jobs or professions with unreported income, as well as discouraged workers who cannot find work.
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In the United States, the unemployment rate is estimated by a household survey called the Current Population Survey, conducted monthly by the Federal Bureau of Labor Statistics. The unemployment rate is calculated by dividing the number of unemployed persons by the size of the workforce. An unemployed person is defined as a person not employed but actively seeking work. The size of the workforce is defined as those employed plus those unemployed.
The labor force participation rate is the ratio between the labor force and the overall size of their cohort (national population of the same age range). In the West during the later half of the 20th century, the labor force participation rate increased significantly, largely due to the increasing number of women entering the workplace.
In the United States, there were three significant stages of women’s increased participation in the labor force. During the late 19th century through the 1920s, very few women worked. They were young single women who typically withdrew from labor force at marriage unless family needed two incomes. These women worked primarily in the textile manufacturing industry or as domestic workers. This profession empowered women and allowed them to earn a living wage. At times, they were a financial help to their families. Between 1930 and 1950, women labor force participation has increased primarily due to the increased demand for office workers, women participation in the high school movement, and due to electrification which reduced the time spent on household chores. In the 1950s to the 1970s, most women were secondary earners working mainly as secretaries, teachers, nurses, and librarians (pink-collar jobs). Claudia Goldin and others, specifically point that by the mid-1970s there was a period of revolution of women in the labor force brought on by a source of different factors. Women more accurately planned for their future in the work force, investing in more applicable majors in college that prepared them to enter and compete in the labor market. In the United States, the labor force participation rate rose from approximately 59% in 1948 to 66% in 2005,[2] with participation among women rising from 32% to 59% [3] and participation among men declining from 87% to 73%.[4][5]
A common theory in modern economics claims that the rise of women participating in the US labor force in the late 1960s was due to the introduction of a new contraceptive technology, birth control pills, and the adjustment of age of majority laws. The use of birth control gave women the flexibility of opting to invest and advance their career while maintaining a relationship. By having control over the timing of their fertility, they were not running a risk of thwarting their career choices. However, only 40% of the population actually used the birth control pill. This implies that other factors may have contributed to women choosing to invest in advancing their careers. One factor may be that more and more men delayed the age of marriage, allowing women to marry later in life without worrying about the quality of older men.
Another factor that may have contributed to the trend was the The Equal Pay Act of 1963, which aimed at abolishing wage disparity based on sex. Such legislation diminished sexual discrimination and encouraged more women to enter the labor market by receiving fair remuneration to help raising families and children.
The labor force participation rate can decrease when the rate of growth of the population outweighs that of the employed and unemployed together. The labor force participation rate is a key component in long-term economic growth, almost as important as productivity.
Pop = total population
LF = labor force = U + E
LFpop = labor force population (generally defined as all men and women aged 15-64)
p = participation rate = LF / LFpop
E = number employed
e = rate of employment = E / LF
U = number of unemployed
u = rate of unemployment = U / LF
The labor force participation rate explains how an increase in the unemployment rate can occur simultaneously with an increase in employment. If a large amount of new workers enter the labor force but only a small fraction become employed, then the increase in the number of unemployed workers can outpace the growth in employment.[6]
Formal labor is any sort of employment that is structured and paid in a formal way.[7] Unlike the informal sector of the economy, formal labor within a country contributes to that country’s gross national product.[8] Informal labor is labor that falls short of being a formal arrangement in law or in practice.[9] Informal labor can be paid or unpaid and it is always unstructured and unregulated.[10] Formal employment is more reliable than informal employment. Generally, the former yields higher income and greater benefits and securities for both men and women.[11]
The contribution of informal laborers is immense. Informal labor is expanding globally, most significantly in developing countries.[12] According to a study done by Jacques Charmes, in the year 2000 informal labor made up 57% of non-agricultural employment, 40% of urban employment, and 83% of the new jobs in Latin America. That same year, informal labor made up 78% of non-agricultural employment, 61% of urban employment, and 93% of the new jobs in Africa.[13] Particularly after an economic crisis, laborers tend to shift from the formal sector to the informal sector. This trend was seen after the Asian economic crisis which began in 1997.[14]
Gender is frequently associated with informal labor. Women are employed more often informally than they are formally, and informal labor is an overall larger source of employment for females than it is for males.[11] Women frequent the informal sector of the economy through occupations like home-based workers and street vendors.[14] The Penguin Atlas of Women in the World shows that in the 1990s, 81% of women in Benin were street vendors, 55% in Guatemala, 44% in Mexico, 33% in Kenya, and 14% in India. Overall, 60% of women workers in the developing world are employed in the informal sector.[7] The specific percentages are 84% and 58% for women in Sub-Saharan Africa and Latin America respectively.[7] The percentages for men in both of these areas of the world are lower, amounting to 63% and 48% respectively.[7] In Asia, 65% of women workers and 65% of men workers are employed in the informal sector.[15] Globally, a large percentage of women that are formally employed also work in the informal sector behind the scenes. These women make up the hidden work force.[15]
Formal and informal labor can be divided into the subcategories of agricultural work and non-agricultural work. Martha Chen et al. believe these four categories of labor are closely related to one another.[16] A majority of agricultural work is informal, which the Penguin Atlas for Women in the World defines as unregistered or unstructured.[15] Non-agricultural work can also be informal. According to Martha Chen, informal labor makes up 48% of non-agricultural work in North Africa, 51% in Latin America, 65% in Asia, and 72% in Sub-Saharan Africa.[11]
The agricultural sector of the economy is shrinking while the percentage of women who are employed in the agricultural sector is increasing.[15] According to the Penguin Atlas of Women in the World, women make up 40% of the agricultural labor force in most parts of the world, while in developing countries they make up 67% of the agricultural workforce.[15] Joni Seager shows in her atlas that specific tasks within agricultural work are also gendered. For example, for the production of wheat in a village in Northwest China, men perform the ploughing, the planting, and the spraying, while women perform the weeding, the fertilizing, the processing, and the storage.[15] In terms of food production worldwide, the atlas shows that women produce 80% of the food in Sub-Saharan Africa, 50% in Asia, 45% in the Caribbean, 25% in North Africa and in the Middle East, and 25% in Latin America.[15] A majority of the work women do on the farm is considered housework and is therefore negligible in employment statistics.[15]
Paid and unpaid work are also closely related with formal and informal labor. Some informal work is unpaid, or paid under the table.[16] Unpaid work can be work that is done at home to sustain a family, like child care work, or actual habitual daily labor that is not monetarily rewarded, like working the fields.[15] Unpaid workers have zero earnings, and although their work is valuable, it is hard to estimate its true value. Feminists have worked long and hard to come up with a way of monetizing and bringing value to women’s unpaid labor.[15] The controversial debate still stands. Men and women tend to work in different areas of the economy, regardless of whether their work is paid or unpaid. Women focus on the service sector, while men focus on the industrial sector. When men and women do hold the same positions, there is quite often a income gender gap.[10]
Women usually work fewer hours in income generating jobs than men do.[11] Oftentimes it is household work that is unpaid. Worldwide, women and girls are responsible for a great amount of household work.[15] One measurement that feminists have created to give a value to unpaid household work is to compare the hours spend on activities within the home by men and women.[15] The Penguin Atlas of Women in the World shows that in Madagascar, women spend 20 hours per week on housework, while men spend only two.[15] In Mexico, women spend 33 hours and men spend 5 hours.[15] In Mongolia the housework hours amount to 27 and 12 for women and men respectively.[15] In Spain, women spend 26 hours on housework and men spend 4 hours.[15] Only in the Netherlands do men spend 10% more time than women do on activities within the home or for the household.[15] Joni Seager also shows in the atlas that in developing countries, women and girls spend a significant amount of time fetching water for the week, while men do not. For example, in Malawi women spend 6.3 hours per week fetching water, while men spend 43 minutes on this activity. Similarly, girls in Malawi spend 3.3 hours per week fetching water, and boys spend 1.1 hours.[15] Even if women and men both spend time on household work and other unpaid activities, this work is also gendered.[11]