Difference Between Activity Rate and Occupation or Employment Rate
The main differences between the activity rate of a country and its employment or employment rate lie mainly in the numerator in the calculation formula for each of these.
In simpler terms, to measure the employment situation of a country, the activity rate takes into account the active population, which is nothing more than the sum of the employed population and the unemployed population.
On the other hand, the employment rate only includes the employed population, without taking into account the unemployed or unemployed population over the total working-age population, between the ages of 16 and 64.
Occupation or employment rate
Suppose we have the following data:
- Employed Population: 17,000,000
- Unemployed Population: 4,000,000
- Inactive Population: 11,000,000
a) Calculate the activity rate.
b) Calculate the occupancy rate.
a) The formula for calculating the activity rate is as follows:
AT= (Active population (PA)/ Population of working age (PET))*100
PA= Employed Population (PO) + Unemployed Population (PD)= 17,000,000 + 4,000,000=21,000,000
To calculate the working-age population (PET), we add the employed population (PO), the unemployed population (PD) and the inactive population (PI) and it gives us a result of 32,000,000.
In this way:
AT= (21,000,000/32,000,000)*100= 65.62%
b) The formula for calculating the occupancy rate is as follows:
TO= (Employed population (PO)/ Working age population (PET))*100= (17,000,000/32,000,000)*100= 53.12%
PET= Employed population + Unemployed population + Inactive population
We have that PET= 32,000,000
TO= (17,000,000/32,000,000)*100= 53.12%
As can be seen, the activity rate and the employment rate are different, although their name may lead to a conceptual misunderstanding.