Nur Layali Mohd Ali Khan; Ahmad Thawrique Mohd Taufan; Nurfarahin Harun; Mohd Ikhwan Abdullah
Box Article 1: The Other Side Of The Coin: Outside Labour Force And Its Potential
Introduction
- The International Labour Organization [ILO] (2021) stated that working-age population is generally defined as persons aged 15 years and older, though the upper and lower limit may differ between countries as they realign the purpose with the legal and policy framework of the respective countries. For the purpose of comparability across countries, the lower limit of 15 years old is used at the global front.
- The ability to earn is more often than not used to monitor a nation’s well-being. In doing this, involvement in the production of goods and services for pay or profit can often provide insights into the health of the labour force. Additionally, the other portion of the labour force not at work but had expressed ability to work and were actively engaged in job search known is identified as unemployed. A country’s labour market performance is gauged from the widely used and quoted indicator of unemployment. Further to that, recent revisions in the concepts and definitions by the ILO in the 19th International Conference of Labour Statisticians [ICLS] have allowed for in-depth analysis of employment situation by measuring the indicators of labour underutilization (ILO, 2013). Many countries have transitioned to the recommended indicators in looking at the well-being of the labour supply, in line with the eighth goal of the 2030 Sustainable Development Agenda to promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all (United Nations [UN], 2021).
- Labour force or those actively engaged in employment or seeking to be employed are assessed in terms of the participation of this group in the labour market. Hence, another labour market indicator to measure involvement of the working age population is the labour force participation rate (LFPR). The ILO (2021; 2016) believed that the LFPR is integral to measure the determinants of a country’s human resources and in making projections of the future supply of labour. Further to this, formulations of labour market and human capital policies and programmes also rely heavily upon the LFPR (ILO, 2016).
- Krueger (2017) investigated the declining trend of LFPR in United States of America. Recently, Coibion, Gorodnichenko & Weber (2020) used the LFPR as one of the three indicators of labour market in the United States of America in time of COVID-19 crisis besides job losses and unemployment. In studying the factors influencing economic growth of North Sumatera Province, Maipita (2020) also included LFPR as one of the indicators of human resource utilisation.