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A person is outside the labour force, according to the International Labour Organisation definition, if he or she is not part of the labour force, meaning he or she is neither employed nor unemployed. The set of people outside the labour is also called the "inactive population" and can include pre-school children, school children, students, pensioners and housewives or -men, for example, provided that they are not working at all and not available or looking for work either; some of these may be of working-age.

Persons outside the labour force comprise all persons of working age who, during the specified reference period, were not in the labour force (that is, were not employed or unemployed). The working age population is commonly defined as persons aged 15 years and older, but this varies from country to country. In addition to using a minimum age threshold, certain countries also apply a maximum age limit.

The inactivity rate conveys the number of persons of working age not economically active (persons outside the labour force) expressed as a percentage of the working age population.

The discouraged job-seekers are a subset of the persons outside the labour force. They are those persons of working age who during a specified reference period were without work and available for work, but did not look for work in the recent past for specific reasons (for example, believing that there were no jobs available, there were none for which they would qualify, or having given up hope of finding employment).