Table of Contents
- What Is Working-Age Population?
- Understanding the Concept of Working-Age Population
- Regional Demographic Impact
- Real-World Example of a Working-Age Population
- Why Does Working-Age Population Matter?
- What's the Impact of an Aging Population?
- Is Working-Age Population Different From Labor Force Participation?
- The Bottom Line
What Is Working-Age Population?
Let me explain what the working-age population means to you. It's the total population in an area that we consider able and likely to work, based on the number of people in a predetermined age range. This range can vary, but it usually starts with older teenagers and goes up to retirement age, such as 18-64 or 15-64.
We use this working-age population measure to give you an estimate of the total number of potential workers within an economy. This helps in understanding various economic statistics.
Key Takeaways
- Working-age population refers to the total number of people in a region who are considered able and likely to work.
- The working-age population statistic is based on a predetermined age range, usually from late teens to retirement age.
- Local employment laws and other considerations may impact the parameters of a given region's working-age population.
- The working-age population is different from the working population, which is the number of people who are employed regardless of age.
- Some workers older or younger than working age may be employed, while others may be working age but not employed.
Understanding the Concept of Working-Age Population
The number of people in a specific age range determines the working-age population. This figure represents the number of capable employees available in an economy, a country, or other specified region.
This measurement doesn't distinguish between those who are gainfully employed and those seeking employment within the range. It's designed to analyze how many people are most likely ready and able to work.
Remember, the working-age population is a different statistic from the working population. The working population measures how many people in a region are employed, regardless of their age.
There are outliers in the working-age population group that this number doesn't consider. These include those actively employed but outside the designated age range, like some who continue working past standard retirement age. Other outliers are individuals within the age range who cannot work due to disability, illness, or caregiving responsibilities.
Regional Demographic Impact
As the demographics of a region change, the working-age population of an economy will shift. Significant changes can impact the economy substantially. If an area has more people in the older range of its working-age population and few teenagers about to enter the workforce, it could eventually have trouble filling jobs.
On the other hand, a region with many young adults and teenagers entering the working-age population and fewer people in their 50s and 60s could soon see fierce competition for jobs. Also, an area with a disproportionate number of people outside the working-age population will rely on a smaller population to generate revenues for the entire region.
Ideally, a local economy should have a steady flow of people both entering and exiting the working-age population each year, along with a healthy balance between those in the determined age range and those outside of it.
Real-World Example of a Working-Age Population
If a region has a working-age population that is declining or insufficient to meet employment demands, it will have difficulty attracting new industries or convincing existing ones to expand. Companies are less likely to open a new branch or factory in an area where filling jobs might be hard. Conversely, areas with larger or growing working-age populations may be more attractive to companies looking to expand or relocate.
Take the example from the Milwaukee Journal Sentinel: When Foxconn reached a deal with Wisconsin in 2017 to open a plant in Racine County, it promised to add 13,000 jobs by as early as 2022. By January 2019, Foxconn had backed away from that number, amid criticism. Critics argued that the area didn't have a large enough working-age population to fill 13,000 jobs in such a short period.
Why Does Working-Age Population Matter?
You should understand a region's working-age population and how it changes over time because it indicates the region's economic prospects. If the working-age population is declining, there will be fewer workers to fill future jobs as current ones retire. There will also be fewer workers to pay taxes and provide vital public sector services. If it's growing, the region will need to attract businesses to create new jobs for those workers.
What's the Impact of an Aging Population?
If a region's population is aging overall, that region's working-age population will decline. Businesses will struggle to fill jobs because there are fewer workers. Aging residents also require more resources, such as healthcare services and pension payments, but with fewer workers to support those costs.
Is Working-Age Population Different From Labor Force Participation?
Yes, working-age population is different from the labor force participation rate. The working-age population includes those who, due to their age, are able and likely to work. The labor force participation rate is the percentage of the working-age population who are working or actively looking for work. Someone can be part of the working-age population but not working or seeking work, such as a parent staying home to care for young children.
The Bottom Line
A region's working-age population is the total number of people in that area who are able and likely to work, based on an age range determined by demographics and employment laws. Usually, this includes older teenagers to those of retirement age, such as 18-64.
This doesn't measure those who are actually working, only those of the correct age to be able and likely to work. A region's working population measures the number of people who are employed, no matter their age. Some people outside of working age will be employed, like younger teenagers or those who retire later. There will also be those included in the working-age population but not working due to disability, illness, caregiving responsibilities, or other factors.
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