What has changed for young people in Canada?

by Diane Galarneau, René Morissette and Jeannine Usalcas

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Overview of the study

In recent years, there has been much discussion and a great deal written about the economic and social well-being of young people. Are they encountering more problems today than in the past? Are some doing better than others? This article paints their socioeconomic portrait and looks at where they are in the labour market in terms of unemployment and certain work conditions.

  • In 1971, young people age 15 to 24 accounted for 19% of the total Canadian population, but, by 2011, this proportion had fallen to 13% and could drop to 11% by 2031 according to a demographic projection scenario.
  • Young people are more educated and are putting off their entry into the labour market longer. In 1976, the maximum full-time employment rate among those age 34 and under was reached at age 25. In 2012, the maximum rate was reached at the age of 31.
  • The unemployment rate of young people has always been higher than that of older Canadians, regardless of economic conditions. In 2012, the unemployment rate of persons age 15 to 24 was 14.3%, a rate twice the national average (7.2%).
  • Over the last three decades, the employment conditions of young people changed differently according to sex, age, and place of residence. Some groups, like women age 25 to 34, even experienced improved employment conditions.
  • In contrast, employment conditions deteriorated for young people age 24 and under, but less so in oil-producing provinces.

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Introduction

Since the recession in the late 2000s, the economic performance of young people has raised numerous concerns worldwide. With an unemployment rate twice the national average for 15- to 24-year-olds, Canada is no exception to the rule.

For some, the future of young people is uncertain and complex, in contrast to the more linear course of the past where years at school were followed by a secure job and relative stability.Note1 The supporters of this view cite the high rate of youth unemployment, the rise in short-term employment, the growing weight of student debt, and the delayed retirement of older workers, which would prevent young people from firmly establishing themselves.

For others, the plight of young people is not as worrisome. First, the length of time that young people are unemployed is relatively short,Note2 and their employment conditions have improved in recent years. Second, older workers hold only a small proportion of the jobs generally held by the youngest workers and therefore would not interfere with their efforts to work.Note3

To gain a clearer picture of the situation, this article provides a brief portrait of younger Canadians. After their social characteristics are considered, two labour-market issues are examined in detail—this article first looks at unemployment trends among younger Canadians and then considers the trends in employment conditions to see if they have changed since the early 1980s.

This article also separately examines the trends in the oil-producing provinces of Alberta, Saskatchewan, and Newfoundland and Labrador, as well as in the other provinces. It is possible that, given the strong economic growth in the natural resource sectors, the employment conditions of young people may have evolved differently in those provinces.

Unless otherwise indicated, in this paper young people are defined as being part of the 15-to-34 age group. Findings are also presented separately for those age 15 to 24 and 25 to 34 to distinguish between young people who are still pursuing their studies most of the time and those who are generally more involved in the labour market. Although the Labour Force Survey (LFS) was the principal data source, several other sources were also used to develop a more exhaustive picture of young people (see Data sources, methods and definitions).

Younger Canadians are more educated and live with their parents longer

Before labour market trends are examined, it is important to understand how younger Canadians today differ from previous generations.

First, young people are facing a very different demographic reality than their parents. Even though the total number of young people age 15 to 24 now is higher than 40 years ago, their demographic weight is steadily declining.

In 1971, 19 % of Canadians were age 15 to 24. In 2011, their proportion had decreased to 13% and, according to Statistics Canada's demographic projection reference scenario, this proportion could even drop to 11% by 2031 (Chart 1). However, there were 4.5 million young people between the ages of 15 and 24 in Canada in 2011 compared with 4.1 million in 1971.

Another characteristic of young people is the fact that a growing number of them are born abroad or born to immigrant parents. In 1971, 3 in 4 young people were Canadian-born to parents who were also Canadian-born, but, in 2011, this was the case for 66% of younger Canadians. According to the demographic projection reference scenario,Note4 this proportion might decrease to 54% in 2031.Note5

chart 1 for What has changed for young people in Canada?

Description for Chart 1

Young people are also different because of their higher level of education. They are increasingly more educated and the vast majority of them hold a high school diploma. According to the LFS, 93% of women age 20 to 24 and 89% of men the same age had earned such a diploma in 2012 compared with 84% of women and 79% of men in 1990. However, significantly lower rates were still observed among specific groups, notably aboriginal young peopleNote6 and those living outside census metropolitan areas.Note7

More and more young people are undertaking postsecondary studies.Note8 According to the National Household Survey, 68% of young people age 25 to 29 held a postsecondary degree or diploma (including trade certificates) in 2011, while this proportion was only 43% at the time of the 1981 Census.Note9

In 2012, 58% of 15- to 24-year-olds were full-time students compared with 39% in 1981. Since young people are staying in school longer, some are delaying leaving the family home as well as their definitive entry into the labour market.

The census data support this view.Note10 In 2011, 25% of young people age 25 to 29 still lived with their parents, compared with 11% in 1981 (Chart 2). Among those age 20 to 24, 59% lived with their parents in 2011 compared with 42% in 1981.

Chart 2 for What has changed for young people in Canada?

Description for Chart 2

In addition, a greater number of young people are starting their careers later. According to the LFS, the full-time employment rate peaked at age 25 in 1976, compared to age 31 in 2012 (Chart 3).

Chart 3 for What has changed for young people in Canada?

Description for Chart 3

Unemployment is always higher among young people

One of the measures most frequently used to illustrate the situation of young people is the unemployment rate. Between 2008 and 2009, the unemployment rate among 15- to 24-year-olds increased from 11.6% to 15.2% and has not changed much since then (Chart 4).

Among young people age 25 to 34, the unemployment rate went up from 5.6% in 2008 to close to 7.9% in 2009, before falling back to 6.9% in 2012. The gap separating them from their older counterparts age 35 to 54 remained at around 1 percentage point throughout the 2000s, including during the economic downturn.

However, the unemployment rate has always been higher among young people, in both periods of slowdown and growth.

Moreover, the peak unemployment rate during the last downturn was lower than the relative peaks observed during the previous two recessions for both 15- to 24-year-olds and 25- to 34-year-olds. Following the recession in the 1990s, for example, the unemployment rate for younger workers age 15 to 24 peaked at 17.2%. After the 1980s recession, the unemployment rate peaked at 19.2% for young people in the same age group.Note11

Chart 4 for What has changed for young people in Canada?

Description for Chart 4

The unemployment rate of younger Canadians was also among the lowest of Organisation for Economic Co-operation and Development (OECD) member countries. In 2011, the rate among those age 15 to 24 was 14.2%, compared with an average of 16.2% for OECD countries and 16.1% for G7 countries. The rate among Canadians age 25 to 34 (7.0%) was also lower than the averages for OECD countries and for G7 countries, which were 9.1% and 8.6% respectively.

Furthermore, the unemployment rate of younger Canadians was also below that of their counterparts the same age in the United States (when both are calculated on a comparable basis). In 2012, the rate was 13.1% for those age 15 to 24 in Canada compared with 16.2% in the United States. For young people age 25 to 34, the rates were 6.0% and 8.3% respectively.

However, the well-being of young people entails more than the unemployment rate. In addition to young people who are unemployed, there are others who are not employed and not attending school. These young people can be identified by calculating the proportion of them that is neither in education nor employment (NEET). This concept emerged mainly in Europe in the 1990s where there was fear that thousands of young people were becoming socially and economically discouraged and disengaged.Note12

Using the OECD international comparisons for 2010, 15% of younger Canadians age 20 to 24 and 8% of those age 15 to 19 were not employed, enrolled in school or in training.Note13 The Canadian results were lower than the average for OECD countries for 20-to 24-year-olds (18.5%), but similar to the OECD average for 15- to 19-year-olds.Note14

Decline in full-time employment among young people in the 1980s and 1990s

Employment and unemployment data are key indicators of the economic well-being young people, but it is also important to examine changes in employment conditions among those who are working. A key indicator in this regard is the proportion of young workers who hold a full-time job.

Even though the percentage of young people with full-time jobs has generally been on the decline since 1976, the trends vary by age, sex, region and period.

Among men and women age 15 to 24, the full-time employment rate decreased mainly during the 1980s and 1990s and has varied slightly since then (Chart 5). The same situation holds true for men age 25 to 34—their rate fell from nearly 90% in 1976 to 80% in 1999, and has remained relatively stable since then.

The trend was different for young women age 25 to 34. Their full-time employment rate rose steadily from 1976 until 2007. Between 2007 and 2012, the rate dropped only slightly to 62%. However, this performance is more than a mere economic phenomenon since young women this age made many educational and professional advances.Note15

Chart 5 for What has changed for young people in Canada?

Description for Chart 5

In addition, not all regions necessarily experienced the same trends because of the natural resources boom during the 2000s. In three provinces in particular—Alberta, Saskatchewan, and Newfoundland and Labrador—a number of young people are currently experiencing a different economic situation as a result of oil production in their province.Note16

Between 1999 and 2012, full-time employment among men age 15 to 24 rose 5 percentage points in the oil-producing provinces, but fell 4 percentage points in the other provinces (Table 1). In contrast, the rate declined between 1976 and 1999 in both oil-producing and non-oil-producing provinces. Similar trends were found among men age 25 to 34.

Interestingly, the differences between oil-producing and non-oil-producing provinces were much less pronounced for women 25 to 34 years of age. Their full-time employment rate increased everywhere—not just between 1976 and 1999—but also between 1999 and 2012 (although the rates decreased between 2007 and 2012).

Table 1 In the 2000s, full-time employment rates increased more quickly in oil-producing provincesNote 1
Table summary
This table displays the results of table 1 in the 2000s total, total excluding full-time students, 15 to 24 years and 25 to 34 years, calculated using percentage units of measure (appearing as column headers).
  Total Total excluding full-time students
Men Women Men Women
15 to 24 years 25 to 34 years 15 to 24 years 25 to 34 years 15 to 24 years 25 to 34 years 15 to 24 years 25 to 34 years
percentage
Oil-producing provinces  
1976 56.1 88.6 39.7 36.3 78.2 90.5 55.5 36.7
1981 59.8 90.2 45.6 46.4 79.8 91.3 61.1 46.9
1989 44.8 81.7 36.5 53.1 68.7 84.5 56.1 54.7
1999 40.0 81.4 29.0 55.2 65.1 84.6 49.9 57.4
2007 48.1 86.9 36.8 62.4 74.3 89.8 59.6 64.8
2012 45.3 85.9 33.7 60.9 71.3 88.9 56.3 62.8
Other provinces  
1976 47.9 88.6 38.5 40.8 72.1 90.2 55.6 41.2
1981 48.0 86.3 39.7 47.9 70.5 87.9 57.1 48.5
1989 45.5 84.3 37.8 56.1 71.6 86.2 59.8 57.4
1999 33.7 79.8 25.4 58.5 60.1 83.1 47.5 60.8
2007 35.0 80.0 26.7 64.3 61.4 83.6 49.8 67.7
2012 29.9 76.9 23.2 61.9 54.0 80.9 43.9 65.2

Wage changes not the same for all young people

Another key indicator of employment conditions is hourly wages among full-time younger workers, for whom data have been available since 1981. Given the small proportion of 15- and 16-year-olds who have a full-time job, wage statistics are presented here for workers age 17 to 24 rather than 15 to 24.

Generally, younger full-time workers had a lower real wage in 2012 than in 1981. The decrease was concentrated mainly among the youngest workers and took place mostly in the 1980s and 1990s.

From 1981 to 1998, the median real hourly wage for men and women age 17 to 24 and working full time fell by approximately 20% (Chart 6), but increased during the 2000s. However, the gains in the 2000s were not enough to offset the losses incurred in previous years—in 2012, the median hourly wages of men and women age 17 to 24 were 13% and 8% lower, respectively, than their counterparts in 1981.

Chart 6
The wage increases of young people in the 2000s did not sufficiently compensate for the losses in the 1980s and 1990s

Chert 6 - Men Chart 6 - Women

Notes : The sample consists of paid workers age 17 to 64 who were employed full-time in their main job in May (in December for 1984). Hourly wages were adjusted using province-specific Consumer Price Index.
Estimates for 1982, 1983, 1985 and 1991 to 1996 are based on data interpolations.
Sources : Sources: Statistics Canada, Survey of Work History, 1981; Survey of Union Membership, 1984; Labour Market Activity Survey, 1986 to 1990; Labour Force Survey, 1997 to 2012.

Description for Chart 6a - Men

Description for Chart 6b - Women

Men age 25 to 34 also experienced a wage decrease in the 1980s and 1990s before an increase beginning in the mid-2000s. However, between 1981 and 2012, they had a less‑pronounced wage decrease (4%) than their counterparts age 17 to 24 (13%).

Wages evolved differently among female workers age 25 to 34. There was almost no change in their wages during the 1980s and 1990s before an increase in the 2000s. As a result, the median wage for women this age in 2012 was 13% higher than for women the same age in 1981.Note17

Once again, there are differences between the oil-producing and non-oil-producing provinces. In the oil‑producing provinces, wage decreases were more significant during the 1980s and 1990s, but increases were also more pronounced between 1998 and 2012, for both men and women (Chart 7).

Chart 7
The wage increases in the 2000s were more pronounced in the oil-producing provincesNote for chart 1

Chart 7 - Hommes Chart 7 - Femmes

1. The oil-producing provinces are Alberta, Saskatchewan, and Newfoundland and Labrador.
Notes : The sample consists of paid workers age 17 to 64 who were employed full-time in their main job in May (in December for 1984). Hourly wages were adjusted using province-specific Consumer Price Index.
Estimates for 1982, 1983, 1985, and 1991 to 1996 are based on data interpolations.
Sources : Statistics Canada, Survey of Work History, 1981; Survey of Union Membership, 1984; Labour Market Activity Survey, 1986 to 1990; Labour Force Survey, 1997 to 2012.

Description for Chart 7a - Men

Description for Chart 7b - Women

Hence, the median real hourly wages of men age 17 to 24 and 25 to 34 who were working full time in the oil-producing provinces fell 32% and 17% respectively between 1981 and 1998. During this period, their counterparts in the other provinces experienced decreases of 22% and 11%. In contrast, from 1998 to 2012, wages for these groups increased 32% and 27% respectively in the oil-producing provinces compared with 9% and 6% in the other provinces.

For women, wage decreases for the two age groups were 27% and 10% respectively between 1981 and 1998 in the oil-producing provinces compared with a decline of 18% and an increase of 2% in the other provinces. However, from 1998 to 2012, wage increases were more substantial in the oil-producing provinces at 32% and 22% compared with 12% for women in both age groups working full time in the other provinces.

Little change in other employment conditions in recent years

What about non-wage employment conditions? Pension coverage remains an important criterion, especially among young people who are more established in the labour market (those age 25 to 34). For men this age, the rate of pension coverage fell from 54% in 1984 to 44% in 2010, while for women the same age the coverage rate was about the same in 1984 and 2010 at 47%. For men, the changes took place mostly in the 1980s and 1990s.Note18

A number of other employment conditions can also affect the economic well-being of younger workers. Statistics Canada data can provide insight on such criteria as union membership, job permanency, involuntary part-time work, and the proportion of university graduates holding low-skilled jobs.

Like full-time employment rates and wages, union coverage mostly deteriorated during the 1980s and 1990s, especially for men age 25 to 34 and those age 24 and under.Note19

Table 2 Other employment conditions changed little for young people in recent years
Table summary
This table displays the results of table 2 other employment conditions changed little for young people in recent years men, women, 15 to 24 years, 25 to 34 years and 35 to 54 years, calculated using non-student employees (percentage) units of measure (appearing as column headers).
  Men Women
15 to 24 years 25 to 34 years 35 to 54 years 15 to 24 years 25 to 34 years 35 to 54 years
non-student employees (percentage)
Union coverage  
1997 16.0 29.6 44.8 13.3 28.8 40.4
2007 17.1 28.4 36.9 14.6 31.8 37.2
2012 17.7 28.0 34.3 16.7 32.6 37.1
Temporary work  
1997 24.1 9.7 6.5 23.1 10.1 8.5
2007 24.6 9.9 7.2 25.8 11.9 8.6
2012 27.6 10.7 7.6 28.4 13.8 9.1
Involuntary part-time  
1997 10.8 3.4 2.0 18.8 8.4 8.1
2007 6.4 2.1 1.6 11.7 5.0 5.1
2012 9.4 2.7 1.9 16.0 6.6 6.1
Overqualified academicsNote for table 2 1  
1997 Note ...: not applicable 17.9 11.1 Note ...: not applicable 18.3 12.6
2007 Note ...: not applicable 18.8 16.4 Note ...: not applicable 20.5 18.9
2012 Note ...: not applicable 18.5 16.9 Note ...: not applicable 21.8 20.3

In contrast, union coverage rates remained relatively stable from 1997 to 2012 among 15- to 24-year-olds and 25- to 34-year-olds. In comparison, these rates decreased among men age 35 to 54, falling from 45% in 1997 to 34% in 2012 (Table 2).

Similarly, the proportion of workers with a university degree who held low-skilled jobs (requiring a high school diploma at most) did not change among workers age 25 to 34 between 1997 and 2012, but increased among those 35 to 54.Note20 For the latter age group, the proportion rose from 11% in 1997 to 17% in 2012 among men and from 13% to 20% among women.

Another key indicator is temporary work as wages and benefits in such jobs are lower.Note21 Between 1997 and 2012, the proportion of younger workers in temporary jobs remained relatively stable, increasing only slightly for both those age 15 to 24 and 25 to 34.

Involuntary part‑time work is also a form of under-employment. Between 2007 and 2012, involuntary part‑time work rose significantly among the youngest workers, but still remained below 1997 levels.

There are some differences between the oil-producing and non-oil-producing provinces, especially among workers age 15 to 24. For example, for young people this age, the proportion holding temporary jobs was lower in the oil-producing provinces in 2012. In addition, 5% of male workers and 9% of female workers age 15 to 24 were in involuntary part-time jobs in these provinces compared with 11% and 18% respectively in the other provinces. In both cases, the gap between oil-producing and non-oil-producing provinces has widened since the late 1990s.

Conclusion

Life today, both social and economic, for younger Canadians is very different than it was for their parents at the same age. Today’s young people represent an increasingly smaller proportion of the total population and are more likely to be born outside Canada or have parents who were born outside Canada. Young people are also more educated but are transitioning to the labour market later in life.

Are matters better or worse for younger Canadians in the labour market today than they were for their counterparts in the early 1980s? The answer differs based on sex, age, and young people’s place of residence (see Summary of employment conditions of young people, 1981 to 2012). Women age 25 to 34 have experienced an improvement in unemployment, full-time employment rates and wages, while for their male counterparts living in non-oil-producing provinces, as well as for those age 24 and under, it was just the opposite. Men age 25 to 34 living in oil-producing provinces had mixed results—in 2012, their full-time employment rates were slightly lower than three decades earlier, but their unemployment rate was similar and their wages were higher.

Nevertheless, changes over the last three decades have not been on a linear trajectory. For example, wages and the full-time employment rate for several groups of young people decreased in the 1980s and 1990s before increasing or stabilizing in the 2000s.

Diane Galarneau is a senior analyst and Jeannine Usalcas is an analyst in the Labour Statistics Division, Statistics Canada. René Morissette is Assistant Director, Social Analysis Division, Statistics Canada.


Notes

  1. See O’Rourke (2012).
  2. See Bernard (2013).
  3. See Certified General Accountants Association of Canada (2012).
  4. The demographic projections are based on Statistics Canada's Demosim model and reflect the population reference results. See Caron-Malenfant et al. (2010).
  5. Based on the same demographic projections, the proportion of young members of a visible minority group could increase from 22% to 37% over the same period.
  6. According the the LFS, 74% of aboriginal young people age 20 to 24 and 79% of aboriginals age 25 to 29 held a high school diploma.
  7. Outside census metropolitan areas, the proportion of high school graduates was 85% in 2012, while it was 93% within census metropolitan areas.
  8. With the growth in education of young people, tuition fees and student debt represent an important aspect of their lives. New information on student debt will be available soon using the 2013 National Graduates Survey for 2010 graduates.
  9. Participation in the National Household Survey was voluntary, while participation in the census was mandatory. Comparisons using aggregate data can be made.
  10. In addition to schooling and labour market conditions, other economic circumstances (like the cost of housing) and certain social circumstances (like ethnocultural characteristics) can also influence these trends.
  11. The peak unemployment rate for persons age 35 to 54 in the last economic downturn was also lower than the previous two peaks.
  12. See Marshall (2012).
  13. NEETs are not always at risk. For example, most of the NEETs not in the labour force did not want a job, and a certain percentage of them were young mothers (Marshall 2012).
  14. See OECD (2013). NEET rates are calculated based on young people's activity during the LFS reference week. Based on a different study, only a small portion of younger Canadians (between 4% and 5% of those age 16 to 29) would be NEETs during the entire year, that is, without work and not enrolled in school for the entire year (LaRochelle–Côté 2013).
  15. See Turcotte (2011).
  16. See Morissette et al. (forthcoming).
  17. In all instances, the wage disparity between younger workers and older workers widened between 1981 and 1998. The faster increase in average wages of men and women age 45 to 54 compared with those of young people age 25 to 34 observed between 1981 and 1998 was attributed to changes in unionization, seniority, industry and occupation. Among men, these factors accounted for about 40% of the difference, while for women they explained 75%. In contrast, changes in unionization, industry and occupation tended to favour younger workers after 1998 (Morissette et al. 2013).
  18. Changes in pension coverage rates were not limited to young people. Among men age 35 to 54 years in particular, the pension coverage rate fell from 69% in 1984 to less than 60% in 1998, and has never recovered. Morissette and Drolet (2001) show that the decline in the unionization rate and the shift of jobs to sectors with low coverage rates explains at least three-quarters of the decline in the coverage rate observed between 1986 and 1997 among men and women age 25 to 34 and among men age 35 to 54. 
  19. See Morissette et al. (2005).
  20. The increase observed among 35- to 54-year-olds was largely attributable to the increase observed among immigrants in this age group. See Galarneau and Morissette (2004).
  21. See Galarneau (2010).

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