Labour force

The labour force is the sum of persons in employment plus persons in unemployment. Together these two groups of the population represent the current supply of labour for the production of goods and services taking place in a country through market transactions in exchange for remuneration.
Based on the latest international statistical standards, the population of working age in a country may be classified according to their labour force status in a short reference period into three mutually exclusive and exhaustive groups: Persons in employment, persons in unemployment and persons outside the labour force. In addition, among persons outside the labour force, it provides more detailed classification by degree of labour market attachment, enabling identification of the potential labour force. This classification is widely used by countries to produce their official labour market statistics, thus promoting the international comparability of the statistics.
 


Classification of the population by labour force status
The classification of the population of working age by labour force status is based on an assessment in a short reference period (1 week or 7 days) of what the person did (activity principle).

While persons may engage in multiple activities over a given reference period, the classification by labour force status gives priority to 1 hour of employment over other activities (i.e. productive and non-productive activities such as volunteering, studying, sleeping, etc.) and to job search and availability over other situations (priority rule). This serves to ensure each person has only ont labour force status at any point in time and provides a snap-shot picture of the relation of the working age population to the labour market. It is thus not a classification of the principal or main activity of people, nor of their social status. Rather it provides essential information about their participation in and/or access to work for pay or profit, so as to enable monitoring of labour markets.

Current international guidelines

The classification of the population by labour force status has been at the backbone of labour market statistics from many decades now. The latest international recommendations contained in the Resolution concerning statistics of work, employment and labour underutilization adopted by the 19th ICLS in 2013, introduced a number of refinements to improve the relevance of this classification to monitor labour markets.

While the basis for classifying the population by labour force status has not changed (ie. activity principle, priority rule, and 1 hour criterion), the following refinements have been introduced:
  • A refined definition of employment as work for pay or profit. To focus the labour force classification on participation and access to work done for remuneration
  • A strict definition of unemployment referring to persons without work for pay or profit, who are seeking and available to start working for pay or profit in specified reference periods. The stricter definition no longer provides optional exclusions of the job search criterion, thus enabling assessment of labour market conditions that provide opportunities for job search, including in self-employment.
  • A new sub-classification of persons outside the labour force that separately identifies the potential labour force as an important measure of labour underutilization, relevant at times of economic downturn, or in settings with limited labour markets, where few channels for seeking employment exist, or where other contextual factors limit a person’s availability to engage in work for pay or profit.
  • Neutral terminology that replaces the terms “currently/economically active population” and “economically inactive population” for the terms “labour force” and “outside the labour force” in recognition that persons outside the labour force may be involved in forms of work other than employment (e.g. own-use production work, volunteer work, unpaid trainee work), that contribute to national production and to household’s livelihoods and well-being.