Recent youth labour market experiences in Canada

by Gordon Betcherman and René Morissette
Business and Labour Market Analysis Division
Analytical Studies Branch research paper series, No. 063

The labour market experiences of Canadian youth improved during the 1980s when measured by the absolute and relative unemployment rate, the participation rate, the employment-to-population ratio, and the incidence of involuntary part-time work. However, with the onset of the 1990-92 recession, youth labour market outcomes have deteriorated considerably. In addition to the difficulties stemming from macroeconomic conditions, young workers face continuing problems getting access to well-paid, entry-level jobs in the goods sector and certain service industries.

During the 1980s, relative annual earnings of young workers fell. This decline occurred in conjunction with a decrease in relative hourly wages. The fall in relative hourly wages, which had earlier been documented for the 1981-86 period, still held in 1989, suggesting that it was not simply a response to cyclical conditions. Decreasing relative hourly wages for young workers were widespread in the 1980s ; they occurred within all educational, major industrial, and occupational groups.

There are divergent views on the issue of scarring, i.e. on the extent to which labour market experiences upon entry affect subsequent employment outcomes. A simple tracking exercise done for young workers produces mixed results.

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