Participation Rate

Posted in Finance, Accounting and Economics Terms, Total Reads: 738

Definition: Participation Rate

Participation Rate is a combined rate of people who are employed in a job plus unemployed people looking for a vacancy. 

People who are unemployed by choice or are not searching in exchanges are not part of participation rate.

Typically the working age is defined as the persons between the age group of 16 to 64 in the United States. Persons in this age group which are not counted as the participating in the labor force are typically the students or the homemakers or the persons under the age of 64 & are retired. The labor force participation rate in the United States is normally around 67 to 68%. During the time of an economic recession, most of the workers get discouraged & they stop searching for an employment. As a result of this, the participation rate declines at that time.

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