# Labor Force Participation Rate

*Macro & Economy — Finicade finance glossary*

The participation rate is the share of the working-age population either employed or actively looking for work. It's the number that makes the unemployment rate readable: unemployment can fall simply because discouraged workers stopped searching and left the count entirely. Long-run declines are driven by demographics, and short-run swings by whether people believe a job is findable.

**Formula:** `Participation rate = Labour force ÷ Working-age population`

**Also known as:** participation rate, labour force participation

**Related terms:** [Unemployment Rate](https://finicade.com/glossary/unemployment-rate), [NAIRU](https://finicade.com/glossary/nairu), [Productivity](https://finicade.com/glossary/productivity), [GDP (Gross Domestic Product)](https://finicade.com/glossary/gdp), [Output Gap](https://finicade.com/glossary/output-gap)

**Taught in:** Macro & Markets — Unemployment: Counting the Idle

Source: https://finicade.com/glossary/labor-force-participation-rate