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Saturday, December 14, 2013

Labor Force Participation Gaps (U.S. vs. Canada)

This post is meant as a complement to my earlier posts: [1] Employment Gaps, [2] Employment Slumps in Canada and the U.S., and [3] U.S. Labor Force on Trend?

In what follows, I report the labor force participation rates (LPRs) for Canada and the U.S., for males and females, and across various age groups (1976-2013). Let's take a look first at  prime-age males and females.
 

To the extent that one can consider the Canadian LPR a measure of a common trend (the Canadian recession being less severe than in the U.S.), one might be able to support the idea of a 1-2ppt LPR "gap" for the U.S. 


The behavior of prime-age females across the two countries appears quite similar up until the mid-to-late 1990s. The divergence since then has been quite remarkable. (Has anyone heard of any explanation for why this might be the case?)

Here we have teen-aged males and females. In both cases, we see big gaps emerging some time around 2000.
 


Next we have young males and females. 



And finally, older males and females:



Any comments or suggested references that speak to these patterns would be appreciated. 

5 comments:

  1. This article, which you've probably already seen, fills some gaps: http://www.td.com/document/PDF/economics/special/Canada_US_unemployment.pdf.
    I do wonder about a cluster of public policy differences and effects on female employment: relative growths in size of public service, universal health care, abortion and contraceptives, availability of quality public schooling for children and lower-priced post-secondary education, etc. On the social-business side, I wonder if there is less of a racial/discrimination bias in Canada.
    I wonder also if anyone has disaggregated US data by regions and states. Is it possible that there are regions in the US that match (or surpass Cda) in the performance of females, and whether the results correlate to intra-region differences in public policy/social habits?

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    Replies
    1. Thank you, Henry, I had not seen that report. The explanation they offer is this one:

      "The relative outperformance of female participation rates
      in Canada is also due in large part to economic outperformance,
      especially in sectors where female employment is
      more prevalent such as services and government. From 2000
      through 2012, employment in services industries grew by
      1.8% annually in Canada compared to just 0.6% annually
      in the U.S."

      Would be interesting to investigate.

      I have also thought of comparing rates across Canada and border states. Will keep you posted.

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  2. Not that I have/can make any sense of this (or even determine whether it is relevant), I do think it's worthwhile to note that Canada's labor force, as of 2012, is much older than the U.S. According to data from BLS and Statcan, Canada's prime age working group (25-54) represents 51% of the total labor force, while for the U.S. it's 66%, and for 55+ it's 33% and 22% respectively.

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  3. Maybe because welfare pays more than work in most states. http://www.cato.org/publications/white-paper/work-versus-welfare-trade

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  4. The US tertiary (college) enrollment rate for the age cohort in question has been rising steadily, particularly for US females. If the rate since 2000 has not been rising as quickly in Canada, this could explain part of the difference in LFP.

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