Economists often suggest that data on the labor force participation rate and unemployment should be taken into account together to get a better understanding of an economy's true employment situation. Changes in the working-age population from one generation to the next also have an effect on participation in the labor force. The trend in the participation rate of women in the labor force is largely similar to long-term trends in the total population.
The labor force participation rateis a measure of the percentage of adults who are employed or actively looking for work. The Bureau of Labor Statistics calculates the labor force participation rate, based on a monthly survey conducted by the United States.
It does not include those who work in the military, prisons, or who are outside the ordinary labor market. An increase in college attendance among younger people on the age spectrum is another factor that reduces labor force participation. The participation rate of women in the labor force almost doubled, from 32% to 60% between 1948 and 1998. The participation rate has been decreasing since the late 1990s, largely due to the retirement of baby boomers and other demographic changes. Economic policies, such as strong labor market regulation and generous social benefit programs, may also tend to decrease labor force participation.
This roughly corresponds to some of the downward trends in labor force participation in the 21st century. The Territory of Puerto Rico is also on the list, ranking among those with the lowest rates of participation in the labor force, with 40%.The labor force participation rate is an important metric for analyzing employment and unemployment data, since it takes into account people who have stopped looking for work, making it a more reliable figure than the unemployment rate.