Youth and the Labor Market in Canada Since the Great Recession

Youth and the Labor Market in Canada Since the Great Recession

Samir Amine (Université du Québec en Outaouais, Canada) and Wilner Predelus (Université du Québec en Outaouais, Canada)
DOI: 10.4018/978-1-7998-2779-5.ch006

Abstract

In Canada, recent data show a marked improvement in the youth unemployment rate for the first time since the last recession, although their participation in the labor force remains below the expected thresholds. In the context of a historically low unemployment rate, this chapter aims to dig deeper into the data to understand how youth has fared in the labor market since the last recession compared to the older people, and mainly in the area of gender disparities. In this context, the authors analyze the unemployment and the participation rates by age and by sex. Furthermore, they provide an insight on the youth regional unemployment rates.
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As is the case for Canadians aged 25 years and over, youth unemployment rate has consistently declined since the last recession, when it peaked at 15.3%, to stand at its lowest level in 2019 (10.9%). In terms of population looking for jobs, there were on average 328,000 younger workers in 2007 against 309,000 in 2019 (Statistics Canada, 2019). Furthermore, as it can be seen in figure 1, the great recession hit young Canadians harder than older Canadians.

Figure 1.

Trends in unemployment rate (2007-2019)

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In fact, while youth experienced a jump of 3.6 percentage points in the unemployment rate from 2008 to 2009, unemployment rate increased by only 2.0 percentage points among the population aged 25 years and older. This situation can be the result of a combination of factors playing against younger workers. Firstly, since young workers have generally less seniority on the job than older workers, they are more likely to be slacked than the latter. Secondly, some sectors, like retail, accommodation and food services that attract to younger workers more than to older workers, were more exposed to the recession, which may partly explain why unemployment rate skyrocketed among the former. Thirdly, younger workers often hold a job while studying, which sometimes may require accommodations from employers. In a sluggish economy, employers may have less incentive to provide accommodations to hire or keep younger workers on the job. Finally, there is the prejudice among some employers who believe that younger workers tend to have a sense of entitlement and being less loyal than older workers are. When the time comes to tighten the belt during a recession, employers might also feel more compelled to stick to older workers than to younger workers.

However, one can also observe in the figure 1 that during the recovery and the growth periods, unemployment rate declined faster among younger workers than Canadians aged of 25 years and older. From a gap of 8.2 percentage points in 2009 at the height of the recession, unemployment among youth has significantly dropped to bring the gap to its lowest level at 6.1 percentage points in 2019; a level that remains steady since 2017.

Figure 2.

Unemployment rate within youths

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Key Terms in this Chapter

Full-Time Employment: Consists of persons who usually work 30 hours or more per week at their main or only job.

Part-Time Employment: Consists of persons who usually work less than 30 hours per week at their main or only job.

Youth Unemployment Rate: Is the number of unemployed young people (aged 15 to 24) as a percentage of the labour force.

Participation Rate: Is the number of employed and unemployed people as a percentage of the population.

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