Management and Organizational Studies 2275A/B Study Guide - Labour Force Survey, Discouraged Worker, Potential Output
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Monitoring Jobs and Inflation
• Every month, Statistics Canada surveys 54,000 households to track the
state of the nation’s labour market.
• This survey is called the Labour Force Survey.
• The working-age population is the total number of people aged 15
years and over.
• The working-age population divides into two groups: those in the
labour force and those not in the labour force.
• The labour force divides into two groups: the employed and the
• A person is employed if they have either a full-time job or a part-time
• A person is unemployed if they are in one of the following categories:
o Without work but has made specific efforts to find a job within
the previous four weeks
o Waiting to be called back to a job from which he or she has
been laid off
o Waiting to start a new job within four weeks
• Statistics Canada calculates four labour market indicators:
o The unemployment rate
o The involuntary part-time rate
o The labour force participation rate
o The employment-to-population ratio
• The unemployment rate is the percentage of the people in the
labour force who are unemployed.
• Unemployment rate = (Number of people unemployed ÷ Labour force)
• The involuntary part-time rate is the percentage of people in the labour
force who have part-time jobs and want full-time jobs.
• Involuntary part-time rate = (Number of involuntary part-time workers
÷ Labour force) X 100.
• The labour force participation rate is the percentage of the
working-age population who are members of the labour force.
• Labour force participation rate = (Labour force ÷ Working-age
population) × 100.
• The employment-to-population ratio is the percentage people of
working age who have jobs.
• Employment-to-population ratio = (Number of people employed ÷
Working-age population) × 100.
• The labour force participation rate and the employment-to-population
ratio show upward trends.
• The unemployment rate increases in recessions and decreases in
• The upward trends in the labour force participation rate and the
employment-to-population ratio are accounted for mainly by the
increasing participation of women in the labour market.
• Two types of labour are excluded from the official unemployment
o Marginally attached workers
o Part-time workers who want full-time jobs
• A marginally attached worker is a person who currently is neither
working nor looking for work but has indicated that he or she wants
and is available for a job and has looked for work sometime in the
• A discouraged worker is a marginally attached worker who has
stopped looking for a job because of repeated failure to find one.
• People become unemployed if they:
o Lose their jobs and search for another job
o Leave their jobs and search for another job
o Enter or re-enter the labour force to search for a job
• People end a spell of unemployment if they:
o Are hired or recalled
o Withdraw from the labour force