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The employment/population ratio measures the employment rate in a region and shows the percentage of workers that need to be employed. However, it may not accurately represent the ratio of employed to unemployed due to exclusion of certain categories of workers and personal reasons for not working.
The employment/population ratio is a measure applied to grouping the dynamics between the total number of employees who work or workers who have some form of employment in juxtaposition with the total number of workers in the region under consideration. That is, the employment/population ratio seeks to find the employment rate or the unemployment rate in a stated geographic location, by calculating the statistics obtained during that employment/population ratio order. One fact that can be deciphered after applying this model is a determination as to whether the resulting numbers prove that the economy is functioning as it should, creating enough work for the aggregate labor force. This model will also show the percentage of workers that need to be employed, giving analysts an idea of the state of the economy and a measure to measure the region’s Gross Domestic Product (GDP) macroeconomic factor.
While employment to population has its merits, some critics are of the opinion that this measure does not provide an accurate representation of the ratio of employed to unemployed versus total labor force due to several factors identified. One reason given is that this measure fails to include certain categories of workers in the calculation, including people such as undocumented workers, those excluded on the basis of age, and others. For example, a considerable number of workers are employed in some capacity in the economy, even if they are not officially represented due to numerous considerations. These people are usually paid in cash and still contribute to the economy through their productivity and consumption, even if they don’t officially exist.
Another category of workers that are often excluded from the calculation of the employment-to-population ratio are those who are above or below the demographic target but who are still working and contributing to the economy. An additional factor that may negatively affect the application of the employment-to-population ratio measurement is the fact that some people choose not to work due to personal reasons. For example, some workers who have some form of family support or other form of funding may choose not to work elsewhere to raise a family or to enroll in a school to pursue higher education.
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