Activity Rate is an important variable that intervenes in the economic development of a country, measures the activity level in employment. That is, this indicator indicates what percentage of the population of a country actively participates in the labor or labor market, with which the population can be separated into active population and population inactive.
It is important to consider that it depends on various factors such as: Demographic and economic structure of the country, cultural habits, tax structure, level of taxation, wealth of the country. country and its distribution, working hours, productive specialization, length of working hours, flexibility in jobs, mortality, implementation of social insurance, education.
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The National Institute of Statistics (INE), is the body that is in charge of publishing the activity rate and its variations annually, using the active population survey as a reference.
In this article you will find:
What is the activity rate and how is it calculated?
It is an economic metric used to measure the strength of the labor market of a country, it accurately measures the percentage of the population that resides in the work fiber. Considering that it classifies as a member of the labor force, a person who has a job (employed population) or is energetically looking for a job (unemployed population).
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For the foregoing, the active population it is made up of employed and unemployed. On the other hand, this part of the workforce that is looking for a job and is not able to find it, becomes part of the unemployment rate.
The activity rate It is the result of dividing the total number of active persons (PA) and the population over 16 able to work (PET), multiplied by 100.
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Activity rate = active population / population of working age x 100
For example, the activity rate for a certain country is 65%, which means that 65 people out of 100 aged 16 or over have a permanent job or are looking for one.
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Important considerations
It should be clear that at the time of stipulating the percentage of the active rate and the exact data of the active population of a country, there are entities that are specifically in charge of this, so that they represent reliable data for the country.
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The current economic crisis that has hit the world, has caused an excessive increase in rates unemployment, which due to its direct relationship with employment, has revealed a decrease in the activity rate. However, it should be noted that the statistics are not entirely accurate since, for example, a certain individual is considered as part of the economically active population, without having a job and without looking for it because they are not interested in working, this individual is considered unemployed despite the fact that perhaps there is a job offer for him to be part of the Work market.
Some economists and experts support the idea that the decline in the labor force is also a result of the outsourcing and automation, which is why many workers lose their jobs and then no longer are successful in finding a new one so they radically leave the workforce of the country.
This is why you see the Activity rate as a fairly accurate measure of the labor market scenario, rather than the unemployment rate, which only considers labor force in the calculation. To be better understood: An unemployment rate of 15% means that 15 out of 100 individuals in the workforce have a job in stable work, but it does not consider unemployed workers who stop looking for work even though they want and need to get a job job.
