Montreal — The COVID-19 pandemic has forced thousands of Canadians out of jobs — many of them permanently. With mass vaccination and economic recovery on the horizon, it’s time to start thinking about long-term adjustment policies to support these displaced workers. New research from the Institute for Research on Public Policy shows that, even when jobs are scarce, few laid-off workers pursue adjustment strategies that could help them get back on their feet.

The study by Statistics Canada researchers René Morissette and Theresa Qiu is the first in Canada to investigate, simultaneously, four adjustment strategies that people might employ after losing their jobs: relocate, pursue post-secondary education, take up an apprenticeship and become self-employed.

Focusing on workers laid off in 2009 — in the middle of the last major recession — the authors find that only one out of six displaced workers adopted at least one of these strategies a year after losing their jobs. Five years after job loss, that proportion was only slightly higher — one out of five.

Whether displaced workers adopted any adjustment strategies and which one they opted for varied considerably, according to characteristics such as

• Gender: In the first year after job loss, the most common strategy among laid-off women was to enrol in post-secondary education. Men were more likely to move to another region. Five years after job loss, moving to another region was the predominant strategy for men and women.
• Age: Older displaced workers were less likely than were younger ones to move to another region or invest in acquiring new skills, in the short and long terms.
• Education: Laid-off workers with less education were significantly less likely than those with degrees to start their own businesses or pursue post-secondary education, in the short and long terms.

Overall, the authors conclude that job loss in and of itself appears to have had very little impact on the adoption of adjustment strategies, most likely because the majority of displaced workers tend to find another job shortly after being laid off. Nevertheless, they note that the majority of workers who did remain jobless one year after losing their jobs — three-quarters —  had not adopted any of the four strategies in the short term.

“Identifying who these workers are, why they chose not to pursue any of these avenues to deal with job loss, and which policies, if any, could help them fare better in the labour market, are important questions for future research and policy development,” say Morissette and Qiu.

Adjusting to Job Loss When Times Are Tough, by René Morissette and Theresa Qiu, can be downloaded from the IRPP’s website (irpp.org).

The Institute for Research on Public Policy is an independent, national, bilingual, not-for-profit organization based in Montreal. To receive updates from the IRPP, please subscribe to our e‑mail list.

Media contact: Cléa Desjardins, tel. 514-245-2139 cdesjardins@nullirpp.org