Montreal — With thousands of Canadians laid off from work due to the COVID-19 pandemic, it’s hard to predict who will return to steady jobs and when. Yet, a new study from the Institute for Research on Public Policy (IRPP) on long-term trends in permanent layoffs from 1978 to 2016 reveals that the Canadian labour market has been remarkably resilient, even through multiple economic downturns and a period marked by globalization and profound demographic, technological, and environmental changes.
“Despite numerous changes in the economic environment over the past four decades, the likelihood of Canadian workers losing their job has not increased overall and the likelihood of laid-off workers finding new jobs has not decreased,” note the study’s authors, Statistics Canada analysts René Morissette and Theresa Hanqing Qiu. If anything, the likelihood of losing one’s job has trended downward for many groups of workers. From 2010 to 2016, permanent layoff rates among employees aged 25 to 64 averaged 6.6 percent, down from the 8.3 percent average from 1978 to 1980.
Some categories of displaced workers are more adversely affected by job loss than others, however. Consistent with previous research, the study finds that employees who hold degrees, those employed in larger firms or who have long job tenure (that is, those who have been with the same employer for six or more years) are significantly less likely to lose their jobs. Once they lose their jobs, however, long-tenured workers have more difficulty getting re-employed and they experience higher than average drops in pay. Even five years after being laid off, many are unlikely to have regained their previous level of earnings.
Importantly, and contrary to the impression one might get from media headlines, the authors find that the majority of job losses that occurred since 1994 did not result from mass layoffs (when firms with 50 or more employees lay off at least 10 percent of their workers). Also, those displaced in non-mass layoffs were less likely than those who lost their jobs in mass layoffs to be re-employed in the short and long term.
“This study’s findings regarding the workers more at risk of job joss and poor employment and earnings outcomes has important implications for policy-makers,” says Natalia Mishagina, who directs the IRPP’s research program on The Future of Skills and Adult Learning. “Optimal assistance policies may have to vary depending on the type of layoff and the profiles of workers involved. Targeting vulnerable groups of displaced workers and adapting policies to their specific needs should be a top priority for governments in the coming months, as the labour market settles into a new normal,” she explains.
Turbulence or Steady Course? Permanent Layoffs in Canada, 1978-2016 by René Morissette and Theresa Hanqing Qiu can be downloaded from the Institute’s website (irpp.org).
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