How much of Canada's
unemployment is structural?
by Lars Osberg and Zhengxi Lin
Business
and Labour Market Analysis Division
Analytical Studies Branch research paper
series, No. 145
This paper starts from the definition that "structural
unemployment occurs when workers are unable to fill available jobs because they
lack the skills, do not live where jobs are available, or are unwilling to work
at the wage rate offered in the market." This implies that the number of
vacancies in the Canadian labour market is an upper bound to the extent of "structural
unemployment".
The paper summarizes available estimates of the vacancy
rate in Canada. In the high technology sector, vacancies may be equivalent to
2.2% of the labour force but evidence from more representative surveys indicates
a range of 0.43% to 0.75% for the economy as a whole. Although during the 1980s
the outward shift in the relationship between the Help-Wanted Index and the unemployment
rate raised concerns that structural unemployment was an increasing problem in
Canada, that shift has been reversed in the 1990s.
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the full publication.
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