Definition of Labor Supply
The CPS (Current Population Survey) classifies all people aged 16 or older into three categories: The employed, the unemployed and the out of labor force. So it is clear that
And the labor force participation rate would be
means the whole population of the country. Notice that the Unemployment rate would be , that is we do not count the people that are out of the labor force.
Until now it is still similar to the topics in the ECON2005 Intermediate Macroeconomics
The potential problem of “Hidden Unemployed” may make the unemployment rate much higher than the official figure. See [[Budget Constraint]
The Theory of Decision to Work