Commentary
About the data
Definitions
Data sources
The labor force includes both people who are currently employed and those who are unemployed. In practice, it is difficult to count the unemployed accurately, especially in developing countries. And it may be just as difficult to know who is fully employed.
According to the International Labour Organisation (ILO) definition, the unemployed are those "without work but available for and seeking work." Countries with unemployment insurance systems often base estimates of unemployment on those who file claims and thus certify that they are seeking work. But these systems do not count discouraged workers who have given up their job search because they believe that no employment opportunities exist or do not register as unemployed after their benefits have been exhausted. In developing economies rural women may not be counted as part of the labor force during seasons of low agricultural activity.
Some unemployment—often called "frictional unemployment"—occurs in all economies as a result of the normal operation of labor markets. At any time, some workers are temporarily unemployed—between jobs as employers look for the right workers and workers search for better jobs. In countries without unemployment insurance or other forms of social assistance, it may not be feasible to remain without work for a prolonged period. Instead, people find some form of work, often in informal or unrecorded activities.
Taking into account the underemployed—those engaged for only a few hours a week or employed in jobs requiring lower qualifications than they have—would yield a higher estimate of labor underutilization. Household surveys that examine unemployment and underemployment confirm that unemployment figures alone may seriously underestimate the underutilization of labor (table 2.3a).
Table 2.3a Unemployment and underemployment in three countries
percentage of the labor force
|
Country |
Year |
Un- employed |
Discouraged workers |
Under- employed |
|
1988-89 |
1.6 |
1.5 |
24.1 |
|
1994 |
0.4 |
.. |
14.5 |
|
1992-93 |
1.3 |
3.5 |
10.0 |
Source: World Bank 1995g.
Data on the labor force, or economically active population, are collected by the ILO from the latest census or survey of countries.
Despite the efforts of the ILO to encourage the use of international standards, labor force and employment and unemployment data are not fully comparable because of differences among economies, and sometimes within economies, in definitions (for example, daily or weekly rates) and coverage. Data comparability is also hampered by differences in methods of collection, classification, and tabulation. The reference period is another important source of differences: in some countries census data refer to the status of each person on the day of the census or survey or during a specific period before the inquiry date, while in others the data are recorded without reference to any period. And in some countries the statistics on labor force relate to people above a specific age, while in others there is no specific age provision. For a review of the problems relating to definitions, methods of collection, and classification of data on the labor force, see ILO (1990a) and the chapter notes in the ILO Yearbook of Labour Statistics.
The estimated population aged 15-64 typically provides a rough estimate of the economically active population. But in many developing economies children under 15 work full or part time. And in some high-income countries many workers postpone retirement past age 65.
Estimates of women in the labor force are not comparable internationally, because in many countries large numbers of women assist on farms or in other family enterprises without pay, and countries differ in the criteria used to determine the extent to which such workers are to be counted as part of the labor force.
Reliable estimates of child labor are hard to obtain. According to UNICEF's The State of the World's Children 1997, in many countries child labor is officially presumed not to exist, and so is not included in surveys or covered in official data. Data are also subject to underreporting because they do not include children engaged in agricultural or household activities with their families. Available statistics suggest that more boys than girls work, but the number of working girls is often underestimated because surveys do not include girls working as unregistered domestic help or those doing full-time household work in order to enable their parents to work outside the home.
Definitions
• Population aged 15-64 is the number of people who could potentially be economically active, excluding children.
• Total labor force comprises people who meet the ILO definition of the economically active population: all people who supply labor for the production of goods and services during a specified period. It includes both the employed and the unemployed. While national practices vary in the treatment of such groups as the armed forces and seasonal or part-time workers, in general the labor force includes the armed forces, the unemployed, and first-time job-seekers, but excludes homemakers and other unpaid caregivers and workers in the informal sector.
• Average annual growth rate of the labor force is computed using the exponential end-point method. See Statistical methods for more information.
• Females as a percentage of the labor force shows the extent to which women are active in the labor force.
• Children 10-14 in the labor force is the share of that age group that is active in the labor force.
Labor force estimates are calculated by the World Bank's International Economics Department by applying sex-specific activity rates from the ILO database, Estimates and Projections of the Economically Active Population, 1950-2010, to the World Bank's population estimates to create a labor force series consistent with its population estimates. This procedure sometimes results in estimates of the absolute size of the labor force that differ slightly from those published by the ILO in its Yearbook of Labour Statistics.