Labour Force Participation Rate (LFPR)
Context: India's Labour Force Participation Rate have declined from 46% to 40% between 2016-17 to 2021-22-Centre for Monitoring Economy
This means that out of 100 members of the Population only 40 people are looking for work as a labour
About LFPR:
The Labour force participation rate is an estimate of an economy's active workforce.
The number of people ages 16 and 64 who are working or looking for employment is called the Labour force participation rate (LFPR)
- It is an important metric when the economy is not growing or witnessing a recession
- It is a measure undertaken to evaluate the working-age population in an economy
- Participation rate estimates the total number of people who are currently employed or looking for employment
- People who are not looking for a job like students, aged people, housewives are not part of the working population
Recent Trends in LFPR
- A statewide analysis of LFPR in March 2016 and March 2022 shows that only one state, Rajasthan, recorded an overall increase in the working population
- Southern states like Tamil Nadu and Andhra Pradesh, which had the Highest LFPR in March 2016, recorded the sharpest drop
- The share of the population that participated in the economy either by working or looking for work dropped by 6 % in 2022, the decline was more in urban areas as LFPR slipped by 7% points
- Apart from Rajasthan, all states recorded a decline in 2022
- In rural areas, between March 2016 and March 2022, only two states have shown an increase in LFPR -Rajasthan, Gujarat
- In Urban areas, between March 2016 and March 2022, four States/UTs have shown an increase in LPR-Chandigarh, Rajasthan, Haryana, J&K
