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Labour Force Participation: A Comparison of the United States and Canada

Author

Listed:
  • James Ketcheson
  • Natalia Kyui
  • Benoit Vincent

Abstract

This note explores the drivers behind the recent increase in the US participation rate in the labour market and assesses the likelihood of a similar gain in Canada. The growth in the US participation rate has largely been due to a pickup in the participation of prime-age workers following a post-recession decline. The prime-age participation rate in Canada, however, did not experience a significant drop following the 2008–09 recession, suggesting that the scope for drawing more prime-age workers into the Canadian labour force is more limited than in the United States. This does not preclude the possibility that the Canadian participation rate could rebound for other reasons, however. Indeed, the Canadian youth participation rate fell following the recession and could potentially recover in response to stronger labour market conditions. While the US youth participation rate also fell following the recession, this continued a long-standing trend decline in this rate, which suggests the recent drop in the United States could be more permanent.

Suggested Citation

  • James Ketcheson & Natalia Kyui & Benoit Vincent, 2017. "Labour Force Participation: A Comparison of the United States and Canada," Staff Analytical Notes 17-9, Bank of Canada.
    • Handle: RePEc:bca:bocsan:17-9
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    File URL: https://www.bankofcanada.ca/wp-content/uploads/2017/07/san2017-9.pdf
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    References listed on IDEAS

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    1. Stephanie Aaronson & Tomaz Cajner & Bruce Fallick & Felix Galbis-Reig & Christopher Smith & William Wascher, 2014. "Labor Force Participation: Recent Developments and Future Prospects," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 45(2 (Fall)), pages 197-275.
    2. Francine D. Blau & Lawrence M. Kahn, 2013. "Female Labor Supply: Why Is the United States Falling Behind?," American Economic Review, American Economic Association, vol. 103(3), pages 251-256, May.
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    Cited by:

    1. Jamie Culling & Hayden Skilling, 2018. "How does New Zealand stack up? A comparison of labour supply across the OECD," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 81, pages 1-19, April.

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    More about this item

    Keywords

    Labour markets; Recent economic and financial developments;

    JEL classification:

    • E - Macroeconomics and Monetary Economics
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J - Labor and Demographic Economics
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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