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1 1 (March 19, 2024)

handle is hein.crs/goveorc0001 and id is 1 raw text is: Congressional Research Service S Informing the IegisIatived dbaesincel1914 The Labor Force Participation Rate March 19, 2024 This In Focus provides an introduction to the Labor Force Participation Rate (LFPR), a key measure of the labor market. It is the fraction of people who are engaged in the labor force, whether they are employed or actively looking for employment. H ow the Labor Force Participation Rate is Calculated The Bureau of Labor Statistics (BLS) releases the official estimate of the LFPR each month. This is the number of people participating in the labor force-whether they are employed or unemployed-as a percentage of the civilian non-institutional population. LFPR = - Employed + Unemployed Civilian Noninstitutional Population BLS estimates the LFPR from the data collected in the Current Population Survey (CPS), a monthly survey conducted jointly by BLS and the Census Bureau. This survey has a sample size of 60,000 households per month, selected to be representative of the U.S. civilian non- institutional population. It does not include people on active military duty, people who are incarcerated, or people in residential care facilities. Survey interviewers ask several questions about the labor force status of each person aged 16 or older in each surveyed household to classify them as * employed, if during the week before they are interviewed they worked at least one hour as a paid employee or in their own business, they were temporarily absent from their job or business, or they worked without pay for at least 15 hours in a family- owned business; * unemployed, if during the week before they are interviewed they were not employed, they were available to work, and they were either temporarily laid off from a job to which they expected to be recalled or had made at least one active effort to find a job during the previous four weeks; or * not in the labor force, if they are neither employed nor had actively searched for a job. Why People Are Not in the Labor Force Some reasons people are classified as not in the labor force are economic-people want a job, but believe no jobs are available for them and they have not looked for a job in the previous four weeks. These people are called discouraged workers. Other reasons people are not in the labor force appear to be noneconomic-they are full-time students, they have family responsibilities that would conflict with employment, they may be disabled in a way that prevents employment, or they may be fully retired. Many decisions about labor force participation also involve a mix of economic and noneconomic factors, both of which can be influenced by policy. Decisions about whether to continue schooling or to retire may be influenced by labor market conditions as well as the out-of-pocket cost of schooling and the work incentives of Social Security program rules. Decisions about labor market participation for parents with partners can be affected by the cost and availability of child care. When the number of jobs is increasing and wages are rising, more young adults, previously discouraged workers, and people with family responsibilities may join the labor force and more older adults may postpone retirement. BLS estimates expanded versions of the unemployment rate (the number of unemployed people divided by the number of people in the labor force) that include discouraged workers. However, BLS does not count people as discouraged workers if they say they are not currently looking for work due to reasons such as family responsibilities, schooling, or disability. Thus, the LFPR and the unemployment rate provide distinct, complementary measures of labor market conditions. L F PRs by Age, Sex, Race, and E ducation By Age In 2023, the LFPR rose from 26.5% for people aged 16-17 to a peak of 84.5% for people aged 30-34 as young adults complete their schooling and join the labor force. The LFPR then declines with age as people retire. This pattern is shown in Figure 1. Figure 1. Labor Force Participation Rates by Age and Sex: 2023 Source: Bureau of Labor Statistics, Current Population Survey

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