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The employment-to-population ratio is defined as the proportion of an economy’s working-age population that is employed.

As an indicator, the employment-to-population ratio provides information on the ability of an economy to create jobs; for many countries it ranks in importance with the unemployment rate. Although a high overall ratio is typically considered “good”, the indicator alone does not provide information on labour market problems such as low earnings, underemployment, poor working conditions, or the existence of a large informal sector.

For most economies, the working-age population is defined as persons aged 15 years and older, although this varies slightly from economy to economy. The ILO standard for the lower age limit is, in fact, 15 years. For many economies, this corresponds directly to societal standards for education and work eligibility. However, in some economies, particularly developing ones, it is often appropriate to include younger workers because “working age” can, and often does, begin earlier. Some economies in these circumstances will use a lower official bound and include younger workers in their measurements. Similarly, some economies have a limit for eligibility at the upper ages, such as 65 or 70 years and over, although this requirement is imposed rather infrequently.

Apart from issues concerning age, the population base for employment ratios can vary across economies. In most cases, the civilian non-institutional population of working age is used, excluding members of the armed forces – either the total or those stationed within the borders – and individuals residing in mental, penal or other types of institutions. Many economies, however, include the armed forces in the population bases of their employment ratios even when they do not include them in the employment figures, which are most often likely to be “civilian” measures.

Source Publication:
Key Indicators of the Labour Market (KILM): 2001-2002, International Labour Organisation, Geneva, 2002, pages 49 and 53.

Statistical Theme: Labour statistics

Created on Friday, August 9, 2002

Last updated on Friday, August 9, 2002