The Evolution of Job Stability in Canada: Trends and Comparisons to U.S. Results

Using data from the 1976-1999 Canadian Labour Force Survey, we examine the stability of currently held jobs in a manner similar to Diebold, Neumark and Polsky (1997) and Neumark, Polsky and Hansen (1999) who analyzed data from the U.S. Current Population Survey. We find that although the current distribution of in-progress job tenures is filling up with more long jobs, and more shorter jobs - suggesting a polarization of job tenure, the stability of currently held jobs has remained quite stable over the period. A closer look reveals two phases in the Canadian data. The period 1977 to 1993 was characterized by declining job stability. Examining the data by current job tenure, we see a declining stability of short jobs - those less than one year in length were less likely to last one more year in at the end of the 1980s (and beginning of the 1990s) than in the late 1970s. At the same time jobs between one and two years long tended to become more stable - becoming more likely to last one more year by 1993. The second phase - 1993-1999 - was characterized by a reversal of these trends such that by the end of the period, jobs of all lengths were equally as stable as in the late 1970s. Declines across the 1980s in job stability were concentrated in low education, older and younger groups but job stability grew most for these same groups in the 1990s. Following U.S. methods allows us to undertake an international comparison. We find that while job stability changes were similar in the two countries between 1987 and 1991, job stability rose relative to the United States between 1991 and 1995. We speculate that this difference is due to a relatively deeper recession in Canada in the early 1990s, and a relatively slow recovery in the mid 1990s.