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Discussion Paper

OLDER WORKERS: CHALLENGES AND POLICY ISSUES

Background and Issues Paper

March 2007



Contents

1. Introduction

The Honorable Monte Solberg, Minister of Human Resources and Social Development announced the appointment of an Expert Panel to study labour market conditions affecting older workers on January 23, 2007.

Erminie Cohen, a retired Senator, was appointed as Chair of the Expert Panel. Senator Cohen has been joined by three panel members, also selected for their experience in studying policy issues: Bill MacKinnon, Chief Executive and Senior Partner, KPMG Canada; Craig Riddell, Professor, University of British Columbia; and Diane Bellemare, Senior Vice President and Chief Economist, Conseil du patronat du Québec.

As outlined in Budget 2006, the mandate of the Expert Panel is to:

"conduct, in partnership with the provinces and territories, a feasibility study to evaluate current and potential measures to address the challenges faced by displaced older workers, including the need for improved training and enhanced income support, such as early retirement benefits."

The Expert Panel terms of reference also include an examination of the broad labour market context for older workers, including:

  • the impacts of population aging;
  • the barriers and disincentives for older worker participation in the labour market;
  • the characteristics and circumstances of displaced older workers;
  • the current support and services available to older workers;
  • possible policy initiatives to help older workers, and
  • the potential program impacts on the labour market.

Recognizing the importance of provincial and territorial governments, employers and labour representatives and academics, the Expert Panel is undertaking an extensive consultation process. The Expert Panel will meet with the provinces and the territorial governments about issues as they occur in the different regions of Canada. Regional roundtables will also be organized with other stakeholders in order to hear their views. Locations and dates will appear on our website.

The purpose of this discussion paper is to provide Canadians with an opportunity to consider the labour market issues affecting older workers today and in generations to come. It is designed to support a dialogue with the provinces and territories, as well as with a broad range of stakeholders and academics. In so doing, it provides details on labour market pressures, and on this group of workers, particularly displaced older workers, and asks questions of which the answers could help frame the development of future policy initiatives.

We encourage you to read this document and send your written submission to the address below or to our website at www.ow-ta-sec.org  The issues and the questions raised are not exclusive. You are invited to raise any issue or question that is relevant to you or your organization. The information received will be considered by the Expert Panel as it prepares its report, which will be presented to the Minister of Human Resources and Social Development later this year.

Secretariat for the Expert Panel on Older Workers
7th Floor, 355 North River Road
Place Vanier, Ontario
Canada   K1A 0L1

2. Preface to the Issues

The Canadian economy, as a whole, has performed well during the past decade in terms of inflation, trade and overall growth rates. Some labour market outcomes have also been impressive. Unemployment rates declined to the lowest levels attained in thirty years. We have also had strong employment growth and steady progress towards increased skills and education levels in the labour force. Other outcomes, however, such as the increase in income inequality, have been a source of concern.

The impressive economic record was achieved while the Canadian economy was subject to an array of ongoing pressures. The main factors creating stresses included economic globalization, sustained high rates of technological change, and demographic changes in the labour force. Consequently, the economy and labour market have undergone considerable adjustment, including industrial restructuring, changes in firm size, shifts in economic activity across regions, increased economic concentration in urban areas, and changes in the composition and characteristics of the labour force.

While there is continual "churn" as workers leave or lose their jobs and find new ones, the pressures on the economy have created both "upside adjustment" (i.e., increasing demand for workers in growth occupations and industries) and "downside adjustment" (i.e., job losses). Though the labour market has adapted well, not all workers affected by adjustment pressures in the economy have successfully adjusted. This observation is reflected, for example, in the different unemployment rates across workers of different characteristics (e.g., education; age), in different industries, and in different regions of the country.

One group of particular concern is older workers who are subject to adjustment pressures. The labour market outcomes of older workers, as a group, generally compare favorably to those of younger workers. But some segments of older workers, especially those who are displaced, are likely to be at risk.  Older displaced workers tend to have lower levels of education, may require training, may be less geographically mobile, and may face employer discrimination based on age-characteristics that tend to reduce the likelihood of them finding gainful employment once they are displaced.

Displaced older workers generally have available to them a range of existing programs that provide income support and active support for adjustment. But there are gaps in the "safety net" that these programs provide older workers, and distinctive labour market circumstances may require new programs aimed at older workers. The issue of the adjustment of displaced older workers, like many others associated with aging, is expected to become more importance in the future as the population and the workforce ages.

There are also concerns that, as the workforce ages, barriers and disincentives for older workers participating in the labour market may exist. For example, the current supports available to older workers may not be sufficient, and their prospects for long-term employability may not be adequate. Where older workers do face problems and difficulties, a central issue is whether or not there is a role for government policy to address some of the problems. Further, if there is a role for policy, what are the likely program impacts on the labour market? There may also be appropriate roles for individuals, unions and employers to address some of the issues faced by older workers.

The purpose of this discussion paper is to identify some of the major labour market issues faced by older workers and to begin the discussion with preliminary questions.1

3. Canadian Labour Market in Context

Over the past decades, long running and underlying forces of change have created pressures on the Canadian economy. These ongoing factors interact with each other, creating constant pressure and the need for proactive economic and labour market policies:

Competitive pressures

These pressures have resulted largely from the globalization of not only capital and product markets, but also goods and services production. Although Canadian trade linkages with the United States have deepened under the FTA and NAFTA, both Canada and the United States face intense worldwide competition across a range of industries.2  These competitive pressures are expected to continue as emerging economies such as China, India and the former East European bloc countries become not only significant producers of goods and services, but also consumers. Further, pressures will rise as these economies are increasingly integrated into the world production and trading systems.

Technological change

Technological advances are transforming production systems, work systems and employment relations. 3 They are creating new and often knowledge-based industries (e.g., in the bio-medical sciences) and transforming the basic nature of old industries (e.g., telecommunications; manufacturing). Innovations are not only being developed more rapidly, but they are also more readily transferable across national boundaries, thereby enabling competitors worldwide to become established and to react quickly.

Changing demographics of Canada

A significant aging of the population is occurring as the "baby boom" generation moves into the older age group. 4 Growth in the population is slowing because fertility rates are declining. 5 One result is a slowing growth rate in the working age population, which is expected to result in slower growth in the labour force. This is predicted by some observers to adversely affect Canada's productivity growth. 6 In addition, average life expectancy continues to increase in Canada. 7 The aging of the population and the increase in life expectancy are expected to reinforce each other, placing pressure on Canada's social welfare and health systems.8  

4. Main Challenges to the Canadian Labour Force and to Older Workers

One of the major factors underpinning Canada's strong economic performance is the overall flexibility of its labour market. 9 To continue its good performance, there are three major structural issues in the Canadian economy that require flexibility in the labour market: 10 

(i) Major shifts in economic activity across industries over time.

Over the past half-century, there has been a relative shift away from agriculture and goods producing industries in favour of services.11  Shifts in economic activity within goods and service producing sectors continue to require significant labour force adjustments as some industries expand and others contract.12

(ii) The regional dimension of economic activity remains a major feature of the economy.13

Central Canada (Ontario and Quebec) and Western Canada (Alberta and British Columbia) remain the largest regional economies, accounting for roughly 60% and 25% of the Canadian labour force, respectively. Canada also has significant regional variations in major labour market outcomes, including participation and unemployment rates. Since 2002, overall employment growth has been the largest in central and western Canada, although employment growth by major industry (e.g., construction) varied considerably by region.

(iii) Canada continues to have a significant number of single-industry communities. Many of these are based in broader resource or traditional manufacturing industries.  

The closure of the primary firm in single-industry communities represents a significant challenge for displaced workers and affected communities. Further, the adjustment challenges of older workers are accentuated in single industry communities. As traditional industries decline in the labour market, workers displaced by these changes may require training or mobility assistance to become re-employed. Economic realignment across regions may also require that workers be mobile, often over considerable distances.

Also, in the past, Canada could sustain a relatively high standard of living because of its natural resources and its competitive advantages in many sectors. Traditional sources of competitive advantage provided access to capital pools for investment, ready access to natural resources and technological innovation. Economic globalization and the rise of the information era have created new challenges for Canada, as for many other industrialized countries. Increasingly, advanced industrial countries compete on the basis of having an educated and skilled workforce that supports the development of high technology, value-added industries and productivity growth. It can be concluded that a nation's "human capital" becomes a major determinant of its competitive capability. 14 

Canada has, increasingly, recognized the importance of human capital formation and utilization as a part of a competitiveness strategy. While debate remains over whether or not our investment in human capital (i.e., in training and education) is sufficient, the skill and education levels of Canada's workforce compare reasonably favorably to many other major OECD countries. 15 But high levels of educational attainment are not distributed equally among workers. In particular, levels of educational attainment tend to be lower in those who are of an older age. For individuals within a given age group, higher levels of educational attainment are associated with better labour market outcomes, such as higher earnings, higher labour force participation rates and lower unemployment rates. 16 

For many workers, the speed of change has necessitated continuous learning. Increasingly, employees can expect to perform new tasks at the same job and a variety of jobs throughout their professional careers. Canadians may need to develop new skills at various times in their working lives, so that they can adjust to changing labour market conditions throughout their careers.

In the Canadian context, labour market adjustment therefore often requires a combination of geographic mobility, changes in employment across occupations or industries, and investments in job search, training and education. However, mobility may be constrained by many factors, impeding moving across provinces, across industries and occupations and, sometimes, even within a firm. Professional mobility may also be impeded by a lack of skills recognition or limited access to skills providers. These issues may pose particularly difficult challenges to some older workers.

5. An Aging Canadian Workforce and the Need for Increased Labour Force Participation

Since changing demographics (e.g., the aging baby boom generation) are creating an older workforce, a significant negative impact on labour supply is expected. Older workers work, on average, fewer hours (e.g., part-time); 17 and they have lower labour force participation rates. 18 

The OECD estimates that, under current conditions, labour force growth will likely level off within the next decade. One key determinant of future labour supply will likely be the labour force participation rates of the growing segment of older persons; yet, some older workers tend to face barriers to labour force participation, including employer attitudes and access to training. 19

Immigration has been one important source of labour force growth, and this is expected to continue. But Canadian immigration rates are already high, relative to other OECD countries. Even substantial increases in the level of immigration are unlikely to sufficiently slow the decline in labour force growth.

Our standard of living relies, among other factors, on the working effort of our population. If the labour force declines because of aging, overall growth in the economy is likely to follow the same path. This, in turn, may reduce growth in GDP per capita and may adversely affect growth in our standard of living. To avoid such a scenario, it will become imperative to substantially increase productivity growth. But, the question remains if the required rise in productivity will materialize.

The employability of older workers in the Canadian labour market is a priority for several reasons. First, increasing labour force participation rates, especially among older workers, has been estimated to potentially, and significantly, increase the size of the labour force over time. 20 This could, in turn, support long term and overall economic growth.

Second, for many individuals, ongoing participation in meaningful employment is intrinsically rewarding. It contributes to their social and economic well-being in the present as well as in the post-retirement period. Gainful employment for older workers permits them to further add to their post-retirement income (e.g., through contributions to pensions or private savings). It also reduces the likelihood of dependence on social programs. These considerations are especially important in view of life expectancy increases.

6. Labour Market Context and Employability of Older Workers

The majority of older workers' labour market experience compares quite well to other segments of the labour force. Even so, some older workers face significant challenges to their continued labour force participation and to their successfully adjustment to changing economic and job conditions. These challenges pose threats to their overall economic security.

As we have seen in the previous section, older workers are an increasingly important segment of the labour force in most industrialized countries, primarily because of the aging of the baby boom generation. This is also the case in Canada. So far, workers aged 55 and older have fared well in the Canadian labour market from 2001-05, benefiting from increased employment rates and decreased unemployment rates.21

However, the labour force participation rates of older workers declines with age, especially after the age of 45. The labour force participation rates of older workers also have a significant regional impact, with the rates being the lowest in Atlantic Canada and Quebec. 22 

Average weekly hours of work also tend to decline with age. Consistent with this, the share of part-time employment, which has become significant component of total employment, increases with age.

The combination of the increase in the older segment of the population, their tendency to have lower labour force participation rates and work fewer hours, will result in reduced growth in the economy's labour supply. One appropriate policy response may be to find ways to encourage an increase in the participation rate of older workers.

While older workers have improved their labour market situation in recent years, and generally fare well compared to other segments of the labour force, some portions of the older labour force may be economically vulnerable. This is especially likely for those who lose jobs they held for a long time. Several factors are relevant to older workers:

Job Loss, Unemployment and Earnings:  Although older workers have relatively low unemployment rates, once unemployed, they tend to have longer durations of unemployment. Long-term unemployment increases with age, in terms of both incidence and share.23  The unemployment rate among older workers also has a strong regional dimension, with unemployment rates being higher in Atlantic Canada and Quebec compared to other regions of the country. 24 Older workers, once displaced from their jobs, also tend to have relatively greater wage loss. 25 

Human capital levels and acquisition:  Education and training, two of the major forms of human capital investment, are key determinants of worker productivity.26  For workers within a given age group, higher levels of education and skill are associated with enhanced labour market outcomes. Education is positively associated with earnings and training. 27 It is also associated with a lower likelihood of job loss because education is positively associated with firm-specific training. 28 

But levels of educational attainment tend to decrease with each successive age segment. At each level of educational attainment (e.g., university degree), a smaller proportion of older workers have that level of qualification than do younger workers. 29  Employee participation in employer-sponsored on-the-job training and classroom training also decreases with age. 30  If older workers experience a job loss, then having lower levels of education and skills places them at a disadvantage.

Investments in human capital, as with other types of investments, provide returns in the future. The challenge facing older workers is the short working period that remains in which to capture returns, whether to training or education investments, relative to the time available with an investment made earlier in an individual's career.

Employer behavior and attitudes:  The OECD notes several key employment outcomes that vary by age, including hiring intensity and retention rates. 31 Hiring intensity (i.e., the hiring rate of a given worker group relative to the rate for all workers) tends to decline with age - something also observed, to varying degrees, across OECD countries. This may be due to several factors including: 32 constraints on geographic mobility; relatively high reservation wages;33  and possibly poor success at job search activities. Alternatively, employers may be less willing to hire older workers. In some cases, this may be a manifestation of employer-based age discrimination, wherein employers perceive older workers as less adaptable, less learning-oriented, or less amenable to adopting and utilizing new technologies.34

Employers' reluctance to invest in training for older workers may, as noted above, be based on the low expected return to the investment, given the short time left in their careers. Reluctance on the part of employers to hire or invest in their training may, in some cases, also be a manifestation of employer-based age discrimination. 35 

Constraints on mobility: Geographic mobility within Canada is lower among older workers. 36 The two main factors affecting mobility are the investment value in moving and the costs associated with the mobility. 37 Viewed as an investment decision, the period of time over which one can achieve returns to the initial investment (e.g., in the form of higher compensation or better working conditions) will be greater for younger than for older workers. The monetary costs of moving include the direct expenses of moving as well as the costs associated with housing (e.g., selling a house in a depressed housing market and moving into a more costly housing market).  Other major costs tend to be "psychological" in nature. Psychological costs include the loss of attachments to friends, family and community. Since investments in relationships tend to develop over time, the psychological costs are expected to be higher for older workers. These factors reinforce each other to create greater incentives against mobility amongst older workers relative to younger persons.

7. Policy Considerations

The issues of displaced older workers and of an aging population are more acute in some parts of the country than others. Already, some provinces have responded to these problems, partly by using available measures and programs to address these issues while considering new approaches as well.

This is the time to share different experiences and best practices , as well as to identify new solutions. Many countries, including the United States and various European countries, have adopted policies to support the earnings and employment of older workers and to encourage them to remain longer in the labour force. Those policies vary in approach, including various types of income supports, financial incentives or changes in social security programs. We want to consider whether or not international experiences are relevant for Canada while, at the same time, sharing the knowledge and experiences gained across the provinces.  

For Canada, in the short run, we need to determine the best approach to helping displaced workers maintain their earnings and employment. Doing so may involve modifying existing policies or measures to enhance the protections and supports provided to displaced older workers, including training programs and other active labour market measures, income support programs, mobility assistance programs and programs to facilitate life-long learning. We also need to consider whether or not we should undertake policy measures aimed at increasing the labour force participation of older workers. In this context, a number of questions follow. Their answers could help to frame the policy issues and the development of future policy initiatives as we begin to discuss the issues and possible solutions with Canadian stakeholders.

Selected Key Issues

General Issues:

  • What is the role and scope for government to address the situation of older workers?
  • What are the responsibilities of individuals, unions, employers and communities to address the situation of older workers?
  • Should policies aimed at supporting older workers directly address ways of enhancing their long-term employability?
  • What are the barriers and disincentives for older worker participation in the labour market?
  • How can policies encourage life-long learning to benefit older workers in the future?

Existing policies:

  • Are there gaps in the existing set of programs (federal / provincial / territorial / municipal) available to provide support to older workers? Can we design new measures to address those gaps?
  • Should existing policies or measures be modified to enhance the protections and supports provided to displaced older workers?
  • Would the investment in new programs generate sufficient benefits to justify the cost?

Program Design Issues:

  • Should age be a factor in targeting labour market programs?
  • Should policy measures be designed in a way that targets older workers in need of assistance?
  • Can policies assist in improving access to education and training, ameliorating constraints on mobility, or in changing attitudes of employers?
  • Will programs that provide income support have adverse effects on the incentive to work?
  • Can programs that provide income support be designed in a way that also encourages employment?

Further Reading

Abbring, Jaap H., van den Berg, Gerard J., Gautier, Pieter A., van Lomwel, A. Gijsbert C., van Ours, Jan C., Ruhm and Christopher J. 1993. "Displaced Workers in the United States and the Netherlands." Losing Work, Moving On: International Perspectives on Worker Displacement. pp. 105-194. 

Abe, Masahiro, Higuchi, Yoshio, Kun, Peter, Nakamura, Masao and Sweetman, Arthur. 1993. "Worker Displacement in Japan and Canada." Losing Work, Moving On: International Perspectives on Worker Displacement. pp. 195-300.

Alboek, Karsten, Van Audnrode, Marc and Browning Martin. 1993 "Employment Protection and the Consequences for Displaced Workers." Losing Work, Moving On: International Perspectives on Worker Displacement. pp. 471-511.

Auer, Peter, Efendiolu, Umit and Leschke, Janine. 2005. Active Labour Market Policies Around the World. Geneva: ILO.

Bender, Stefan, Dustmann, Christian, Margolis, David and Meghir, Costas. 1993. "Worker Displacement in France and Germany." Losing Work, Moving On: International Perspectives on Worker Displacement. pp. 375-470.

Betcherman, G., K. Olivas and A. Dar. 2004. "Impacts of Active Labor Market Programs: New Evidence from Evaluations with Particular Attention to Developing and Transition Countries." World Bank Social Protection Discussion Paper Series, No. 0402. Washington: World Bank.

Borland, Jeff, Gregg, Paul, Knight, Genevieve and Wadsworth, Jonathan. 1993. "They Get Knocked Down. Do They Get Up Again?" Losing Work, Moving On: International Perspectives on Worker Displacement. pp. 301-374.

Burbidge, J.B., L. Magee and A.L. Robb, "The Education Premium in Canada and the United States." Canadian Public Policy, 28, no. 2 (2002): 203-215.

Chan, Sewin and H. Stevens, Ann. 2001. "Job Loss and Employment Patterns of Older Workers." Journal of Labor Economics. 19, 2. pp. 484. April.

Chan, Sewin and H. Stevens, Ann. 2004. "How Does Job Loss Affect the Timing of Retirement?" Contributions to Economic Analysis & Policy. Volume 3, Issue 1, Article 5, Berkeley Electronic Press.

Chaykowski, Richard P. 2005. "Non-standard Work and Economic Vulnerability." Canadian Policy Research Networks Vulnerable Workers Series. No. 3, March.

Chaykowski, R. and M. Gunderson. 2001. "The Implications of Globalization for Labour and Labour Markets." In R. Chaykowski, ed. Globalization and the Canadian Economy: The Implications for Labour Markets, Society, and the State. Kingston, ON: Queen's University School of Policy Studies. pp. 27-60.

Conference Board of Canada. 2006. "Canada's Demographic Revolution: Adjusting to an Aging Population." The Conference Board of Canada, Canada.

Fallick, Bruce C., 1996. "A Review of the Recent Empirical Literature on Displaced Workers." Industrial & Labour Relations Review. 50, 1. pp. 5, October.

Farber, Henry S., Haltiwanger, John and Abraham, Katherine G. 1997. "The Changing Face of Job Loss in the United States, 1981-1995." Brookings Papers on Economic Activity. Princeton University. pp. 55.

Gallo, William T., Bradley, Elizabeth H., Siegel, Michele, and Kasl, Stanislav V. 2000. "Health Effects of Involuntary Job Loss Among Older Workers: Findings From the Health and Retirement Survey." The Journals of Gerontology. Yale University. 55B, 3. ProQuest Nursing Journals. pp. S131, May.

Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. The Economics and Econometrics of Active labor Market Programs," in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pp. 1865-2097 Elsevier.

Heisz, A., Morissette, R. and Picot, G. "Job Stability and Labour Market Flexibility." Business and Labour Market Analysis Division. Statistics Canada.

Heisz, Andrew and LaRochelle-Côté, Sébastien. 2006. "Work Hours Instability in Canada." Analytical Studies Branch – Research Paper Series. Statistics Canada, No. 278, March.

Jacobson, L., LaLonde, R. and Sullivan, D. 1993. The Costs of Worker Dislocation. W.E. Upjohn Institute for Employment Research. Michigan.

Kuhn, Peter J. 2002. "Summary and Synthesis." Losing Work, Moving On: International Perspectives on Worker Displacement. pp. 1-104.

MacMullin, Julie Ann, Cooke, Martin and Downie, Rob. 2004. "Labour Force Ageing and Skill Shortages in Canada and Ontario." Canadian Policy Research Networks, Research Report W. 24, Work Network Project W-092, August.

Martin, J. and D. Grubb. 2001. "What Works and For Whom: A Review of OECD Countries Experiences with Active Labour Market Policies." (September) Paris: OECD.

Mazerolle, Maurice J. and Singh, Gangaram. 1999. "Older Workers Adjustments to Plant Closures." Relations Industrielles. 54, 2. pp. 313, Spring.

Mishel, Lawrence R. 1988. "Advance Notice of Plant Closings: Benefits Outweigh the Costs." Challenge. 31, 4. pp. 58, July/August.

Morissette, René, Xuelin Zhang and Marc Frenette. 2007. "Earnings Losses of Displaced Workers: Canadian Evidence from a Large Administrative Database on Firm Closures and Mass Layoffs."  Analytical Studies Branch Research Paper Series, Catalogue no. 11F0019MIE — No. 291 (January).

Morissette, René. 2004. "Have permanent layoff rates increased in Canada?" Analytical Studies Branch – Research Paper Series. Statistics Canada. No. 218, March.

Neumark, David, Polsky, Daniel and Hansen, Daniel. 1999. "Has Job Stability Declined Yet?  New Evidence for the 1990s." Journal of Labour Economics. 17, 4. pp. S29, October.

OECD. 2005. "Ageing and Employment Policies". OECD. Paris

Picot, Garnett and Lin Zhengxi. 1997. "Are Canadians More Likely to Lose Their Jobs in the 1990's?" Analytical Studies Branch - Research Paper Series. Statistics Canada. No. 96, August.

Polsky, Daniel. 1999. "Changing Consequences of Job Separation in the United States." Industrial & Labour Relations Review. 52, 4. pp. 565, July.

Rodriguez, Daniel and Zavodny, Madeline. 2000. "Are Displaced Workers Now Finished at Age Forty?" Economic Review – Federal Reserve bank of Atlanta. 85, 2. pp. 33, Second Quarter.

Saunders, Ron. 2006. "Making Work Pay: Findings and Recommendations." Canadian Policy Research Networks Vulnerable Workers Series. No. 6, May.

Statistics Canada. 2002. "Study: Retaining older workers." Perspectives on Labour and Income. Vol. 5, No. 5.

Statistics Canada. 2001b. A Report on Adult Education and Training in Canada: Learning a Living, Catalogue Number 81-586, (May).

References

Appelbaum, E., T. Bailey, P. Berg and A. Kalleberg. 2000. Manufacturing Advantage: Why High Performance Work Systems Pay Off. Ithaca: Cornell University Press.

Bartel, A. "Training, Wage Growth, and Job Performance: Evidence from a Company Database." Journal of Labor Economics. 13, no. 3 (July 1995): 401–425.

Cappelli, P., L. Bassi, H. Katz, D. Knoke, P. Osterman, and M. Useem. 1997. Change at Work. New York: Oxford University Press.

Commission for Labor Cooperation. North American Labor Markets: A Comparative Profile. Washington, DC: Secretariat of the Commission for Labor Cooperation. 2003.

Courchene, T.  (2001). A State of Minds: Toward a Human Capital Future For Canadians. Montreal:  Institute for Research on Public Policy.

Cross, P. 2006. "The Year in Review: The Revenge of the Old Economy." Canadian Economic Observer. Statistics Canada Catalogue No. 11-010. (April).

Ehrenberg, R., R. Smith and R. Chaykowski. 2004. Modern Labour Economics: Theory and Public Policy. Toronto: Pearson.

Ferrao, V. 2006. "Recent Changes in Employment by Industry." Perspectives on Labour and Income. Statistics Canada Cat. No. 75-001-XIE. (January). pp. 5-10.

Finnie, R. 1999. Patterns of Intr-provincial Migration, 1982-95." Canadian Economic Observer, Statistics Canada Cat. No. 11-010-XPB (December).

Hall, J. 2000. "Investment in Education: Private and Public Returns." House of Representatives, Joint Economic Committee Study, United States Congress (January).

Kuhn, Peter J. 2002. "Summary and Synthesis." Losing Work, Moving On: International Perspectives on Worker Displacement. pp. 1-104.

Lemieux,, T. "The Causal Effect of Education on Earnings In Canada," in Toward Evidence-Based Policy for Canadian Education. P. De Broucker and A. Sweetman, Ed. (Kingston, Ontario: Queen's University John Deutsch Institute, 2002), pp. 105-116.

Mincer, Jacob. 1993. "Education and Employment," in J. Mincer, ed., Studies in Human Capital. Cambridge, UK: Edward Elgar.

OECD. 2005. "Ageing and Employment Policies". OECD. Paris

St.Arnaud, J., M. Beaudet and P. Tully. 2005. "Life Expectancy." Health Reports. Vol.17, No.1 pp. 43-47.

Statistics Canada. 2003. Education in Canada: Raising the Standard. 2001 Census: Analysis Series. Catalogue Number 96F0030XIE2001012. (March).

Statistics Canada. 2001a. The Evolving Workplace Series – Employer and Employee Perspectives on Human Resource Practices, Catalogue Number 71-584, No. 1 (September).

Statistics Canada. 2001b. A Report on Adult Education and Training in Canada: Learning a Living, Catalogue Number 81-586, (May).

Thurow, L. 1992. Head to Head. New York: William Morrow.

Thurow, L. 1999. Building Wealth: The New Rules for Individuals, Companies and Nations. New York: Harper Business.

Verma, Anil and Richard P. Chaykowski, eds. 1999.  Contract and Commitment; Employment Relations in the New Economy.  Kingston; IRC Press, Queen's University.

Endnotes

  • 1 For purposes of this policy study, older workers are defined as spanning the age group 55-64.
  • 2 By the end of the 1990s, the United States accounted for roughly 85% of Canada’s exports and 75% of its imports with a combined value of $375 billion US (Commission for Labor Cooperation 2003).
  • 3 See Appelbaum et al (2000); Cappelli at al (1997); and Verma and Chaykowski (1999).
  • 4 Between 1985 and 2005, the median age of the Canadian population increased from 31.0 to 38.5 years (See: Statistics Canada (2006) Annual Demographic Statistics 2005. Catalogue No. 91-213-XIB. ((March) at p. 5).
  • 5 This is due to several factors, including the tendency to begin child rearing at an older age, as well as changes in social factors (e.g., changes in marital arrangements and family structures). (See: Statistics Canada (2005) Population Projections for Canada, Provinces and Territories 2005-2031. Catalogue No. 91-520-XIE. (December) at p. 18). Fertility rates in Canada have declined significantly over the past three decades, from 2.34 in 1970 to 1.51 in 2002 (Statistics Canada (2005:18, Table 1.1). Projections of fertility rates to 2016 range from a high of only 1.7 to a low of 1.3 (Statistics Canada (2005: 19, Chart 1.1).
  • 6 See Statistics Canada (2005: 48; 48, Chart 3.6).
  • 7 In the past 50 years, life expectancy at birth has increased by just over 10 years for both males (to about 77) and females (to about 82); and Canada ranks among the top 10 OECD countries for longest life expectancy at birth (St-Arnaud, Beaudet and Tully (2005: 43-44).
  • 8 See OECD (2005:36); and see Statistics Canada (2005: 49-50, Charts 3.7-3.9) that shows projections of a significant increase in dependency ratios in Canada.
  • 9 See Cross (2006:3.4).
  • 10 These structural issues have tended to be long run factors that continue to have implications for the Canadian labour market and workers who tend to be more vulnerable.
  • 11 Between 1921 and 2001, the share of total employment in agriculture declined from 33% to about 3%; whereas the share of employment in goods producing industries declined steadily in the post-war period, the share of employment in services steadily increased to reach over 60% by 2000. See Ehrenberg, Smith and Chaykowski (2004:35, Figure 2.3).
  • 12 In 2005, the largest employment gains were in education (8.7%), agriculture (7.9%), construction (6.1%) and the professional, scientific and technical industries; whereas the greatest employment decline was in manufacturing at 4.2%. Over the period 2003-05, manufacturing jobs decreased by over 6% (roughly 150,000). See Ferrao (2006:6, Table 1; and 7, Table 2).
  • 13 On the relative size of regional economies and labour forces, see Statistics Canada. 2006. Canadian Economic Observer. Vol. 19, No. 5 (May) Catalogue No. 11-010-XPB. p. 56, Table 41; and p. 57, Table 42; In 2005, participation rates varied from a low of 58.5% in Newfoundland to a high of 72.7% in Alberta, with 67.2% for Canada as a whole; unemployment varied from a high of 15.2% in Newfoundland and Labrador to a low of   3.9% in Alberta, with a national average of 6.8%. (Source: Statistics Canada (2006) p. 57, Table 42). On regional and industry variation in employment growth, see Ferrao (2006:7, Table 2).
  • 14 On the shift from the traditional determinants of competitive advantage to the new sources of competitiveness, see Thurow (1992; 1999) and Courchene (2001).
  • 15 In 2003, about 44% of the adult population had college or university level education, essentially ranking Canada in the top tier in this measure (Source: OECD. 2005. Education at a Glance. OECD Indicators 2005. Paris: OECD. P. 35, Table A1.1a.
  • 16 See OECD (2005: 103-105).
  • 17 See OECD (2005: 50,51)
  • 18 See OECD (2005: 45, Figure 2.2).
  • 19 See OECD (2005: 37-38, 89-90, and 103-106).
  • 20 The OECD (2005: 37-39) estimated several scenarios corresponding to: (i) increasing the labour force participation rate of all workers over time; and (ii) increasing the labour force participation rate of only those workers aged 50 and older, over time, to the highest rate observed among OECD countries. Either of these scenarios stands to increase the size of the Canadian labour force appreciably.
  • 21 During the recent period from 2001-05, the Canadian population aged 55 and older increased by fully 13.7%; and over the period 2001-05, employment among older workers increased by 35.5%, while the employment rate increased by about 20%; and the unemployment rate decreased from 6.1% to 5.0% -- levels that are consistently lower than the national average (Source: Statistics Canada (2006) “The Labour Market in 2005.”Perspectives on Labour and Income. Statistics Canada Catalogue Number 75-001-XIE. ((January) pp. 23, 24).
  • 22 Although participation rates are low among older workers (at 31.5% relative to the national level of 67.1%, in 2005) the rates did increase by 4.8% over the period from 2001-05 (Source: Statistics Canada (2006: 24)).
  • 23 Source: OECD (2005: 58, Table 2.4).
  • 24 Source: OECD (2005: 59, Figure 2.12).
  • 25 See Kuhn (2002).
  • 26 Other forms of human capital investment, such as investments in an individual’s health, also affect productivity and labour market outcomes.
  • 27 On the effects of education on earnings see Lemieux (2002) and for the effects on training see Bartel (1995). Also see OECD (2005: 111, Figure 5.3) on the correlation between education and training.
  • 28 See Hall (2000: 6) and, more generally, Mincer (1993). For Canada, employee participation rates in employer-sponsored classroom and on-the-job training, respectively, increase with the education levels of employees (Statistics Canada 2001a: 22, Table 2.3).
  • 29 See OECD (2005: Figure 5.1, 105); and see Statistics Canada (2003: 33).
  • 30 See Statistics Canada (2001a: 22, Table 2.3) and Statistics Canada (2001b: Table 2.18). Also see OECD (2005: 109-111) on the negative association between age and training.
  • 31 See OECD (2005: 83-88).
  • 32 See OECD (2005: 85).
  • 33 Older workers with long tenure may earn more within their current organization than the wages they can command in the open market.
  • 34 See OECD (2005: 89).
  • 35 See OECD (2005: 89).
  • 36 See Finnie (1999).
  • 37 See Ehrenberg, Smith and Chaykowski (2004:303).

 
 
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