Question

Why is the “labor participation rate” important? By referring to three real world cases (one being the increase in women’s participation in the labor force) explain how social and economic changes can affect this variable?

Answer 1

Ans) Labour force participation rate is the percentage of civilian non-instituitional population which is working or actively looking for job.

Labour force participation rate = (labour force ÷ working age population)×100

It is important because it tells the relative amount of labour resources that are available for production.

It seen that after second world war, there was a shift in labor force participation rate trend of men and women.

While the labour force participation rate of females has increased due to change in social and political attributes, increase in technology, improved birth control etc. The labour force participation rate of men has decreased due to spending of more years in college, increase in participation of women etc. Further, there is an overall increase in labor force participation rate.

It is also estimated that in coming decades, labour force participation rate will decrease due to improved life expectancy and low birth rate.