The employment rate is the ratio between the population with work and the economically active population.
A rate is a coefficient that expresses the relationship between two magnitudes. Employment , on the other hand, is a paid occupation, profession or trade.
The employment rate is known as the ratio between the employed population and the economically active population (which is able to be part of the labor market ). The most common index, however, is the unemployment rate (the number of unemployed over the economically active population).
What is the employment rate
The employment rate, in other words, allows us to indicate what percentage of workers are actually employed . For example: if the employment rate of a country is 84%, it means that 84 out of every 100 economically active people have a job. The remaining 16 people, however, are unemployed or unemployed; The country's unemployment rate, therefore, is 16%.
In this sense, several issues must be made clear. The first of them is that the employed population refers to the entire active population, aged 16 and over, who has a job, whether employed or self-employed, and who has received remuneration for it. In this sense, this typology also includes those people who earn a salary working in the company of a family member with whom they also live.
The second issue that is also worth making clear is that the active population is made up of all those people in a specific country who have a job or who are looking for one at that moment. In this way, we could determine that under the umbrella of that name there are, therefore, two clearly delimited groups: the employed and the unemployed.
The employment rate is an important economic indicator.
Your calculation
It is interesting to be clear that when determining the percentage and exact figures of a nation's active population, one must turn to the entities that are specifically in charge of this. This would be the case, for example, in Spain of the National Institute of Statistics (INE), whose mission is to calculate various values such as the activity or employment rate based on criteria such as autonomous communities, sex, age...
Currently, due to the economic crisis that is ravaging the world, it must be recognized that employment rates in many countries have reached historical milestones, which shows the seriousness of the situation.
These statistics are never accurate. A subject may be part of the economically active population and not have a job because he or she is not looking for one or is not interested in working. Said individual will be considered unemployed even though, perhaps, there is sufficient labor supply for him to be part of the market .
100% employment rate
The employment rate can also be linked to the notion of full employment , an economic concept that assumes that everyone of productive working age who wants to work has a job.
The demand for labor, therefore, equals the supply, which is reflected in an employment rate of 100% and an unemployment rate of 0.