Definition: Labor force comprises people ages 15 and older who supply labor for the production of goods and services during a specified period. It includes people who are currently employed and people who are unemployed but seeking work as well as first-time job-seekers. Not everyone who works is included, however. Unpaid workers, family workers, and students are often omitted, and some countries do not count members of the armed forces. Labor force size tends to vary during the year as seasonal workers enter and leave.
What makes up the labor force?
The labor force constitutes the proportion of a country’s pool of male and female workers aged 15 years and above who are employed and those currently unemployed but searching for a job. However, it does not include discouraged workers, retirees, and stay-at-home parents. This implies that the totality of the labor force in any country consists of employed and unemployed workers. While employed workers are the set of people who work either through paid or self-employment, the unemployed category consists of those without work, or those currently available for work, and those seeking employment.
Why does the labor force vary across countries?
Differences in the labor force across countries in the world are influenced by several factors. Traditionally, factors such as population size, statutory entry and retirement ages, official school-leaving age, number of working hours and working days, and labor market structure account for the disparity in the labor force of any country. Meanwhile, the existence of seasonal jobs also increases the rate of variation in the labor force from time to time. Countries with high seasonal employment opportunities may tend to have higher labor capacity at one time than other nations.
Furthermore, the economic conditions of countries also determine the number of employed and unemployed workers in the labor force. This is because during a recessionary era, industries tend to lay off workers, which raises the level of unemployment relative to the total population. Meanwhile, periods of an economic boom come with job opportunities that absorb workers.
In addition, geopolitical risks such as wars, conflicts, and terrorism also contribute to variations in the labor force among countries. For instance, countries with high geopolitical uncertainties are likely to have a small labor force since most employed workers may migrate to another nation for their safety, whereas those that are less confronted by geopolitical upheavals may have a large workforce.
If you are interested in global labor regulations and policies, you can visit the International Labour Organization