Employment Rate definition

The employment rate, as defined by OECD, is the employment-to-population ratio – the number of people of working age in the population who are employed.

According to the International Labour Organization, people are considered employed if they’ve had an hour or more in ‘gainful’ employment in the most recent week. The figure also includes people who have stopped looking for work.

The employment rate is seen as the one of the most widespread and useful methods of judging the labour market health of a country – it’s often used alongside the unemployment rate. A high employment rate is generally considered to have a positive effect on a country’s GDP.

When calculating the employment rate, figures of above 70 percent are seen as evidence of a healthy labour market while anything below 50 may suggest inherent problems.

The employment rate is criticised when used as an indication of labour market health because it doesn’t take into account working conditions, earning power or time worked.