The participation rate rose to record levels in 2007
The participation rate measures the total labour force (comprised of those who are employed and unemployed, combined) relative to the size of the working-age population. In other words, it is the share of the working-age population that is working or looking for work.
In 2007, about 17.9 million people were in the labour market, a participation rate of 67.6%. Because more people were working and more people were looking for work, the participation rate was up 0.4 percentage points from 2006. This was the first increase after a three-year slump, and it sent the participation rate to its highest level in 32 years.
From 1976 to 1989, the participation rate followed an upward trend, peaking at 67.3% in 1989. As a result of labour market weakness in the first half of the 1990s, the participation rate fell for seven consecutive years. This was a long decline compared with the single-year dip during the recession of the 1980s. In contrast, the participation rate decreased in 2005, the first time it has done so during a non-recessionary period, before recovering and climbing to a record high of 67.6% in 2007.
Over the next two decades, the participation rate will inevitably decline because of the aging of the baby boom generation and the low fertility rate of recent years. Various scenarios, such as increasing immigration and keeping older workers in the labour force longer, may moderate the downward trend but will not reverse it.
Participation rates, 1976 to 2007
Source: Statistics Canada, Labour Force Survey, CANSIM table 282-0002.
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