In short, the labor force includes all people at the age 16 or older, who are classified as either employed or unemployed.

Employed: 

People age 16 or older are classified as Employed if they meet any of the following criteria:

• Work at least 1 hour as an employee and receive pay.
• Work at least 1 hour in their own business, trade, farm, etc., otherwise known as someone who is self-employed.
• Was temporarily absent from their job, whether of whether not they earn pay for the time off.
• Without pay for a minimum of 15 hours in a company that a family member owns.

Unemployed: 

A person age 16 or older are considered unemployed if they meet the following criteria:

• Volunteering.
• Participating in internships without pay.
• Attending trainings without pay.
• Participate in trainings not sponsored by an employer.
• National Guard or Reserve Duty– more specifically, weekend or summer training.
• Ownership in a business or far for investment purposes, with no participation in operations or management.
• Jury Duty.
• Work around one’s home, for example, cleaning, painting, repair work, etc.

The labor force participation rate includes the number of people in the labor force, as a percentage of the total population. In other words, the participation rate is the percertage of the population that is working or actively searching for a job.

You can use the following equation to calculate the labor force participation rate:

(Labor Force / Population) X 100

We can define active job searching methods as the potential of the result of a job offer, for example:

• Contacting an employer.
• Having a job interview.
• Submitting a resume and/or application.
• Using an employment agency.
• Contacting a job recruiter.
• Placing job advertisements.

Unemployment rate represents the number of individuals who are not working as a percentage of the labor force.

You can calculate the rate using the following equation:

(Unemployment / Labor Force) X 100

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