Employment-to-population ratio

U.S. unemployment rate and employment to population ratio (EM ratio)

The Organization for Economic Co-operation and Development defines the employment rate as the employment-to-population ratio. The employment-population ratio is many American economists' favorite gauge of the American jobs picture. According to Paul Ashworth, chief North American economist for Capital Economics, "The employment population ratio is the best measure of labor market conditions."[1] This is a statistical ratio that measures the proportion of the country's working-age population (ages 15 to 64 in most OECD countries) that is employed. This includes people that have stopped looking for work.[2] The International Labour Organization states that a person is considered employed if they have worked at least 1 hour in "gainful" employment in the most recent week.[3]

Background

The employment-population ratio has not

always been looked at for labor statistics and where specific areas are economically, but after the recent recession it has been looked at more by the American people, especially economists.  The National Bureau Of Economic Research (NBER) states that the recession that began in 2007 ended in June 2009.[4]  During 2009 and 2010, however, many areas were still struggling economically, which lies the reason the employment-population ratio still has the eyes of Americans and people around the world.

Key definitions

U.S. employment statistics and ratios for March 2015

To understand the use of the ratio some key terms follow...

Employed persons. All those who, (1) do any work at all as paid employees, work in their own business or profession or on their own farm, or work 15 hours or more as unpaid workers in a family-operated enterprise; and (2) all those who do not work but had jobs or businesses from which they were temporarily absent due to illness, bad weather, vacation, childcare problems, labor dispute, maternity or paternity leave, or other family or personal obligations — whether or not they were paid by their employers for the time off and whether or not they were seeking other jobs.

Unemployed persons. All those who, (1) have no employment during the reference week; (2) are available for work, except for temporary illness; and (3) have made specific efforts, such as contacting employers, to find employment sometime during the past 4-week period.

Participant rate This represents the proportion of the population that is in the labor force.

Not in the labor force. Included in this group are all persons in the civilian noninstitutional population who are neither employed nor unemployed. Information is collected on their desire for and availability to take a job at the time of the CPS interview, jobsearch activity in the prior year, and reason for not looking for work in past 4-week period.

Multiple jobholders. These are employed persons who, have two or more jobs as a wage and salary worker, are self-employed and also held a wage and salary job, or work as an unpaid family worker and also hold a wage and salary job.

[5]

Use

The ratio is used to evaluate the ability of the economy to create jobs and therefore is used in conjunction with the unemployment rate for a general evaluation of the labour market stance. Having a high ratio means that an important proportion of the population in working age is employed, which in general will have positive effects on the GDP per capita. Nevertheless, the ratio does not give an indication of working conditions, number of hours worked per person, earnings or the size of the black market. Therefore, the analysis of the labour market must be done in conjunction with other statistics.

This measure comes from dividing the civilian noninstitutionalized population who are employed by the total noninstitutionalized population and multiplying by 100.[6]

Employment-to-population ratio in the world

In general, a high ratio is considered to be above 70 percent of the working-age population whereas a ratio below 50 percent is considered to be low. The economies with low ratios are generally situated in the Middle East and North Africa.

Employment-to-population ratios are typically higher for men than for women. Nevertheless, in the past decades, the ratios tended to fall for men and increase in the case of women, which made the differences between both to be reduced.

Employment-to-population ratio in OECD countries
Persons aged 15–64 years (percentages)
Country 1970 1980 1990 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Australia 66.7 65.2 68.4 69.3 69.0 69.4 70.0 70.3 71.5 72.2 72.9 73.2 72.0 72.4 72.7 72.4 72.0
Austria 68.3 68.2 68.8 68.9 67.8 68.6 70.2 71.4 72.1 71.6 71.7 72.1 72.5 72.3
Belgium 54.4 60.9 59.7 59.9 59.6 60.3 61.1 61.0 62.0 62.4 61.6 62.0 61.9 61.8 61.8
Canada 66.1 70.3 70.9 70.8 71.4 72.2 72.5 72.4 72.8 73.5 73.6 71.5 71.5 72.0 72.2
Chile 53.3 52.7 52.6 53.5 53.6 54.4 55.5 56.3 57.3 56.1 59.3 61.3 61.8
Czech Republic 65.2 65.3 65.7 64.9 64.2 64.8 65.3 66.1 66.6 65.4 65.0 65.7 66.5
Denmark 75.4 76.4 75.9 75.9 75.1 75.7 75.9 77.4 77.0 77.9 75.3 73.3 73.1 72.6
Estonia 78.2 61.0 61.4 62.0 62.8 62.9 64.2 67.9 69.2 69.7 63.5 61.0 65.2 67.2
Finland 70.4 70.7 74.7 67.5 68.3 68.3 67.9 67.8 68.5 69.6 70.5 71.3 68.4 68.3 69.2 69.5
France 60.8 61.7 62.7 62.9 64.0 63.7 63.7 63.6 64.3 64.8 64.0 63.9 63.9 63.9
Germany 66.9 65.2 64.1 65.6 65.8 65.3 64.6 65.0 65.5 67.2 69.0 70.2 70.4 71.2 72.6 72.8
Greece 54.8 55.9 55.6 57.5 58.7 59.4 60.1 61.0 61.4 61.9 61.2 59.6 55.6 51.3
Hungary 56.0 56.2 56.2 57.0 56.8 56.9 57.3 57.3 56.7 55.4 55.4 55.8 57.2
Iceland 84.6 84.6 82.8 84.1 82.8 84.4 85.3 85.7 84.2 78.9 78.9 79.0 80.2
Ireland 52.1 65.1 65.7 65.2 65.2 65.9 67.5 68.5 69.2 67.9 62.2 60.0 59.2 58.8
Israel 51.8 56.1 55.7 54.8 55.0 55.7 56.7 57.6 58.9 59.8 59.2 60.2 60.9 66.5
Italy 52.0 53.9 52.6 53.9 54.9 55.6 56.2 57.4 57.5 58.4 58.7 58.7 58.3 57.7 57.8 57.6
Japan 67.9 66.8 68.6 68.9 68.8 68.2 68.4 68.7 69.3 70.0 70.7 70.7 70.0 70.1 70.3 70.6
Korea 59.2 61.2 61.5 62.1 63.3 63.0 63.6 63.7 63.8 63.9 63.8 62.9 63.3 63.9 64.2
Luxembourg 59.2 62.7 63.0 63.6 62.2 62.5 63.6 63.6 64.2 63.4 65.2 65.2 64.6 65.8
Mexico 60.1 59.4 59.3 58.8 59.9 59.6 61.0 61.1 61.3 59.4 60.3 59.8 61.3
Netherlands 54.5 61.8 72.1 72.6 73.0 71.6 71.1 71.5 72.5 74.4 75.9 75.6 74.7 74.9 75.1
New Zealand 67.5 70.4 71.4 72.2 72.2 73.2 74.3 74.9 75.2 74.7 72.9 72.3 72.6 72.1
Norway 72.2 73.0 77.9 77.5 77.1 75.8 75.6 75.2 75.5 76.9 78.1 76.5 75.4 75.3 75.8
Poland 55.0 53.5 51.7 51.4 51.9 53.0 54.5 57.0 59.2 59.3 58.9 59.3 59.7
Portugal 64.3 65.6 68.3 68.9 68.7 68.0 67.8 67.5 67.9 67.8 68.2 66.3 65.6 64.2 61.8
Slovak Republic 56.8 56.9 56.9 57.7 57.0 57.7 59.4 60.7 62.3 60.2 58.8 59.5 59.7
Slovenia 63.4 62.6 65.3 66.0 66.6 67.8 68.6 67.5 66.2 64.4 64.1
Spain 52.7 51.8 57.4 58.8 59.5 60.7 62.0 64.3 65.7 66.6 65.3 60.6 59.4 58.5 56.2
Sweden 72.3 79.8 83.1 74.3 75.4 75.2 74.4 73.7 74.0 74.6 74.2 74.3 72.2 72.1 73.6 73.8 74.4
Switzerland 78.4 79.2 78.9 77.9 77.4 77.2 77.9 78.6 79.5 79.0 78.6 79.3 79.4
Turkey 54.5 48.9 47.8 46.7 45.5 44.1 44.4 44.6 44.6 44.9 44.3 46.3 48.4 48.9
United Kingdom 72.5 72.2 72.5 72.3 72.6 72.7 72.7 72.6 72.4 72.7 70.6 70.3 70.4 70.9
United States [7] 57.4 59.2 62.8 64.4 63.7 62.7 62.3 62.4 62.7 63.1 63.0 62.2 59.3 58.5 58.4 58.6 58.6
Brazil 64.3 65.4 65.0 66.5 67.0 67.4 67.4 68.3 67.7 66.9 67.2
China 79.3 75.1
India 54.8 53.3
Russian Federation 63.3 63.2 64.5 64.1 65.5 66.3 66.8 68.5 68.6 66.9 67.3 68.0 69.0
South Africa 44.1 42.8 41.5 41.6 43.4 44.9 44.4 44.8 42.7 40.8 40.8 41.0
EU-21 61.0 59.5 61.7 62.6 63.0 63.0 63.2 63.5 64.1 64.9 65.9 66.4 65.2 64.8 65.0 64.8
EU-15 61.0 59.5 61.6 63.6 64.3 64.4 64.6 65.0 65.5 66.3 67.0 67.4 66.1 65.8 65.9 65.6
Europe 61.0 59.7 60.9 61.3 61.5 61.3 61.2 61.4 61.9 62.7 63.4 63.9 62.8 62.7 63.1 63.0
G7 Countries 63.9 65.2 67.7 69.0 68.9 68.3 68.2 68.4 68.7 69.3 69.7 69.5 67.7 67.3 67.5 67.9
OECD Countries 64.2 64.2 65.7 65.4 65.2 64.9 64.7 65.0 65.3 66.0 66.5 66.5 64.8 64.6 64.8 65.1
Country 1970 1980 1990 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: OECD.StatExtracts, except as noted

See also

References

  1. ↑ The other unemployment rate. (2012, October 18). Retrieved December 10, 2012, from CNN: Money website: http://money.cnn.com/2012/10/18/news/economy/other-unemployment-rate/index.html
  2. ↑ Employment/Population Ratios for the 50 Largest Metropolitan Statistical Areas: 2008, 2009, and 2010. (2011, September). Retrieved December 10, 2012, from United States Census Bureau website: http://www.census.gov/prod/2011pubs/ acsbr10-09.pdf
  3. ↑ OECD Factbook 2007 (PDF), Organization for Economic Co-operation and Development, 2007, ISBN 978-92-64-02946-0, retrieved 2008-01-31
  4. ↑ Employment/Population Ratios for the 50 Largest Metropolitan Statistical Areas: 2008, 2009, and 2010. (2011, September). Retrieved December 10, 2012, from United States Census Bureau website: http://www.census.gov/prod/2011pubs/ acsbr10-09.pdf
  5. ↑ BLS Handbook Of Methods. (2003, April 17). Retrieved December 6, 2012, from Bureau Of Labor Statistics website: http://www.bls.gov/opub/hom/ homch1_c.htm
  6. ↑ Employment/Population Ratios for the 50 Largest Metropolitan Statistical Areas: 2008, 2009, and 2010. (2011, September). Retrieved December 10, 2012, from United States Census Bureau website: http://www.census.gov/prod/2011pubs/ acsbr10-09.pdf
  7. ↑ http://data.bls.gov/timeseries/LNS12300000