The evolution of job stability in Canada: Trends and comparisons to
U.S. results
by Andrew Heisz
Business and Labour Market Analysis Division
Analytical
Studies Branch research paper series, No. 162
Job stability is an important
recurring issue for Canadians. There has been a sense throughout the 1990s that
Canadians tended to stay in their jobs for a shorter period of time, in part because
of higher layoff rates.
The findings show that although the current distribution
of in-progress job tenures is filling up with more long term jobs, and more shorter
term jobs – suggesting a polarization of job tenure, the stability of currently
held jobs has remained quite stable over the period. A closer look reveals two
phases in the Canadian data. The period 1977 to 1993 was characterized by declining
job stability. Examining the data by current job tenure, we see a declining stability
of short jobs – those less than one year in length were less likely to last
one more year in at the end of the 1980s (and beginning of the 1990s) than in
the late 1970s. At the same time jobs between one and two years long tended to
become more stable—becoming more likely to last one more year by 1993. The
second phase—1993-1999—was characterized by a reversal of these trends
such that by the end of the period, jobs of all lengths were equally as stable
as in the late 1970s. Declines across the 1980s in job stability were concentrated
in low education, older and younger groups—but job stability grew most for
these same groups in the 1990s.
This paper also examines developments in
job stability in Canada relative to the United States. Up to now, such a project
has been hampered by a lack of comparable methods. This study analyses job stability
using a methodology identical to that used in leading U.S. research. Job stability
was at similar levels in the two countries between 1987 and 1995 (the period for
which U.S. results are available). While the research goes to the fullest length
possible to render the data sources comparable, comparisons of levels may still
be unwise. Hence, the paper focuses primarily on developments over time. It finds
that while job stability changed in Canada and the U.S. in a similar manner between
1987 and 1991, job stability rose in Canada relative to the U.S. between 1991
and 1995. This divergence in trends may be because of a relatively deeper recession
in Canada in the early 1990s and slower recovery in the mid-1990s. Such events
likely resulted in reduced firm hiring in Canada relative to the U.S., leading
to a decline in the quit rate, and a rise in job tenure and stability. A rise
in job stability (tenure) is not always a good news story, as it was associated
through most of the 1990s with poor economic conditions and lower quit rates.
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