Are Younger and Older Workers Fighting for Jobs?
There was a spate of media stories recently on a US report finding that increased employment of seniors has no negative impacts at all on young people also seeking work.
In fact, the study by leading US economist Alicia Munnell, looking mainly at the experience of US states, did say that the so-called â€œlump of labourâ€ fallacy may be true when an economy is experiencing very high unemployment and extended stagnation. (p.5)
In Canada as a whole, the employment rate for all workers 15 and over was 61.8% in 2012, while it was 54.5% for young workers age 15 to 24, and 12.0% for workers age 65 and over. (Data from Statistics Canada, CANSIM 282-0002) It is notable that the while the overall employment rate has fallen from 63.5% in 2008, the employment rate of older workers has risen (from 9.8% in 2008) while the employment rate of younger workers remains well below the pre-recession level of 59.7%.
There are some provinces â€“ notably Manitoba, Saskatchewan and Alberta â€“ where the employment rate for young workers age 15 to 24 and for workers age 65 and over are both well above the national average. In a tight labour market, jobs are more readily available for both younger and older workers, raising the employment rate for both groups.
In Alberta, for example, the overall employment rate in 2012 was much higher than the national average at 70.0%, and also well above average for young workers (62.3% vs 54.5%) and for workers age 65 and over (18.4% vs. 12.0%.)
The impact of a tight job market seems to be greater for older than younger workers, raising the employment rate relative to the national average by 53.3% compared to 14.3%.
Ontario, by contrast, had an overall employment rate of 61.3% in 2012, a bit below the national average. Meanwhile, the employment rate for Ontario workers age 65 and over was 12.6%, a bit above the national average. The employment rate for young workers in Ontario was 50.0%, well below the national average of 54.5%.
In Ontario, it seems that older workers have been relatively much more successful finding jobs in a soft job market than have younger workers. The same is true of British Columbia, where the overall employment rate is a bit below average, older workers match the average national employment rate for this age group, and younger workers lag behind the national average.
However, the opposite is true of Quebec. The overall employment rate in 2012 was 60.0%, a bit below the national average, while the employment rate of workers age 65 and over was 8.6%, well below the national average. But the employment rate of younger workers in Quebec was 57.5%, significantly above the national average.
In a relatively slack job market, it seems plausible that there is some competition between older and younger workers for jobs, and that older workers generally tend to do better because of long job tenure and greater work experience.
How then to explain Quebec? Perhaps youth employment policies have made a difference?