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March 2004
Vol. 5, no. 3

Perspectives on Labour and Income

Permanent layoff rates
René Morissette

  • Despite some high-profile corporate downsizing, permanent layoff rates were virtually the same in the 1980s and the 1990s. In 1989, 5.9% of employees permanently lost their job. In 1999, a comparable year in terms of labour market conditions, the proportion stood at 5.7%.
  • While overall permanent layoff rates did not change, two groups—men aged 55 to 64 and women 35 to 44—saw their rates rise. The men's rate increased from 7.4% in 1989 to 8.1% in 1999, and the women's from 3.2% to 3.7%.
  • The risk of permanent layoff rose for large firms, but either fell or changed little in smaller companies. Even though job loss rose in large firms, employees in small firms were, at the end of the 1990s, about three times more likely to lose their job.
  • While workers' chances of losing their job did not rise substantially during the 1990s, their chances of finding a new job in the event of a layoff fell markedly. Between 1985 and 1989, 25% of jobs existing in a given year were filled by new hirings. This rate declined to 21% between 1995 and 1999.
  • As companies hired fewer workers, employees tended to quit much less often. While 9.2% of workers quit their job permanently in 1989, only 7.3% did so in 1999. The decline was widespread and not simply due to the aging of the workforce.
  • Although employees were no more likely to lose their jobs, more were choosing to stay longer with their employer. Hence, average job duration rose between the 1980s and the 1990s.

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Author
René Morissette is with the Business and Labour Market Analysis Division. He can be reached at (613) 951-3608 or perspectives@statcan.gc.ca.


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