The labor force participation rate (LFPR) refers to the number of people available for work as a percentage of the total population. In August 2020, it was 61.7%.﻿﻿

The LFPR measures the amount of labor in an economy, one of the factors of production. The other three are natural resources, capital, and entrepreneurship.﻿﻿

LFPR Formula and Definitions

Here's how to calculate the labor force participation rate:

LFPR = Labor Force / Civilian Non-Institutionalized Population where the Labor Force = Employed + Unemployed

To calculate the formula correctly, you must first understand the underlying definitions outlined by the Bureau of Labor Statistics (BLS). The BLS is the federal agency that reports on the labor force and its participation rate every month in the Jobs Report.

Civilian Non-institutional Population

This comprises everyone living in the U.S. who is 16 or older excluding persons not in the active duty Armed Forces and residing in institutions. Such institutions consist primarily of nursing homes, prisons, jails, mental hospitals, and juvenile correctional facilities.

Labor Force

Everyone who is classified as either employed or unemployed.

Employed

Anyone aged 16+ in the civilian noninstitutional population who worked in the last week. This comprises those who worked an hour or more as paid employees or 15 hours or more as unpaid workers in a family-owned business or farm. It also includes those who had jobs or businesses, but didn't work that week because they were on vacation, sick, were on maternity or paternity leave, on strike, were in training, or had some other family or personal reasons why they didn't work. It doesn't matter whether it was paid time off or not. Each worker is only counted once, even if they hold two or more jobs. Volunteer work and work around the house do not count.

Unemployed

Those aged 16 or more who weren't employed, but are available for work and are actively looked for a job within the past four weeks. People who are only waiting to be recalled to a job from which they had been laid off are counted as unemployed, even if they didn't look for work. Contrary to popular belief, it has nothing to do with the number of people who applied for or receive unemployment benefits. Instead, this figure is derived from a BLS survey. The BLS sets the definition of unemployment.

Who's Not Counted in the Labor Force

People who would like to work, but haven't actively looked for it in the last month are not counted as being in the labor force no matter how much they want a job. But they are counted in the population.

The BLS does keep track of them. It calls some of them "marginally attached to the labor force." These are people who have looked in the past year but just not in the previous month. They might have had school or family responsibilities, ill health, or transportation problems that prevented them from looking recently.

The BLS calls some of the marginally attached, "discouraged workers." These people have reported that they've given up looking for work because they don't believe there are any jobs for them. Others have become discouraged because they lack the right schooling or training. They worry that the potential employer thinks they are too young or too old. Some have suffered discrimination. They are not counted in the headline unemployment rate, but are counted in the real unemployment rate.

The other group that isn't included in the labor force comprises students, homemakers, retired people, and those under 16 who are working. Still, they are counted in the population.﻿﻿

Current Rate

Here's how to calculate the labor force participation rate for August 2020.