Explanation
Labor force participation rate is the correct answer because:
- Per capita GDP = Total GDP / Total population
- Labor force participation rate measures the proportion of working-age population that is employed or actively seeking employment
- When more people participate in the labor force, total output (GDP) increases without necessarily increasing the denominator (population)
- This directly increases per capita GDP
Why not the others:
- Immigration: Increases total GDP but also increases population, so the effect on per capita GDP is ambiguous
- Population growth: Increases total population in the denominator, which may actually decrease per capita GDP if output doesn't grow proportionally
Higher labor force participation means more people are contributing to economic output relative to the total population.