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Assessing Labor Market Conditions in Canada with Public-Use Microdata

Author

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  • Lalé, Etienne

    (York University, Canada)

Abstract

We extend Nakamura et al. (2019, 2020)'s approach of using the publicly available microdata files of the Labour Force Survey (LFS) to construct worker transition rates across employment, unemployment, and inactivity. Our approach involves estimating and applying a scaling factor that has been proposed in earlier research as a way of capturing the relative intensity of job search from inactivity compared to unemployment. This factor provides enough structure to prevent arbitrary splitting of unemployment outflows between employment and inactivity. In turn, the estimated job search factor can be used in a few simple step-by-step instructions applied to the LFS public files to assess near real-time labor market conditions in Canada. An analysis of the recent dynamics of worker flows illustrating the practicality of our approach highlights that transition rates: (a) from employment to unemployment have fallen over time (b) from unemployment to employment were unusually high during the pandemic and (c) have regional differences.

Suggested Citation

  • Lalé, Etienne, 2024. "Assessing Labor Market Conditions in Canada with Public-Use Microdata," IZA Discussion Papers 16722, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16722
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    References listed on IDEAS

    as
    1. Stephen R.G. Jones & Fabian Lange & W. Craig Riddell & Casey Warman, 2020. "Waiting for Recovery: The Canadian Labour Market in June 2020," Canadian Public Policy, University of Toronto Press, vol. 46(S2), pages 102-118, August.
    2. Fujita, Shigeru, 2018. "Declining labor turnover and turbulence," Journal of Monetary Economics, Elsevier, vol. 99(C), pages 1-19.
    3. Kory Kroft & Fabian Lange & Matthew J. Notowidigdo & Lawrence F. Katz, 2016. "Long-Term Unemployment and the Great Recession: The Role of Composition, Duration Dependence, and Nonparticipation," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages 7-54.
    4. Pries, Michael & Rogerson, Richard, 2009. "Search frictions and labor market participation," European Economic Review, Elsevier, vol. 53(5), pages 568-587, July.
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    6. Kory Kroft & Fabian Lange & Matthew J. Notowidigdo & Matthew Tudball, 2019. "Long Time Out: Unemployment and Joblessness in Canada and the United States," Journal of Labor Economics, University of Chicago Press, vol. 37(S2), pages 355-397.
    7. Gary Solon & Ryan Michaels & Michael W. L. Elsby, 2009. "The Ins and Outs of Cyclical Unemployment," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 84-110, January.
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    More about this item

    Keywords

    employment; unemployment; labor force participation; gross worker flows;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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