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Labour Market Flows and Worker Trajectories in Canada During COVID-19

Author

Listed:
  • Pierre Brochu

    (Department of Economics, University of Ottawa)

  • Jonathan Créchet

    (Department of Economics, University of Ottawa, Ottawa, ON)

  • Zechuan Deng

    (Statistics Canada and Department of Economics, University of Ottawa, Ottawa, ON)

Abstract
We use the confidential-use files of the Labour Force Survey (LFS) to study the employment dynamics in Canada from the beginning of the COVID-19 pandemic through to mid-summer. Using the longitudinal dimension of this dataset, we measure the size of worker reallocation, and document the presence of high labour market churning, that persists even after the easing of social-distancing restrictions. As of July, many of the recent job losers - especially those who had been temporarily laid-off between February and April - have regained employment. However, this apparent strong recovery dynamics hides important heterogeneity, and large groups of workers, such as those who were not employed prior to the pandemic, face important difficulties with finding a job. Three factors appear to be key in accounting for the incomplete employment recovery of July: (1) the unusually high separation flows that characterize the labour market in the reopening phase; (2) the low reemployment probability of recent job losers who were classified as out of the labour force during the lockdown; and (3), the low job-finding rate of individuals who were out of work prior to the pandemic. Our results further suggest that gross job losses were higher among women and young workers during the shutdown, and that older workers were more likely to leave the labour force when the economy reopened.

Suggested Citation

  • Pierre Brochu & Jonathan Créchet & Zechuan Deng, 2020. "Labour Market Flows and Worker Trajectories in Canada During COVID-19," Working Papers 2005E, University of Ottawa, Department of Economics.
    • Handle: RePEc:ott:wpaper:2005e
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    File URL: https://ruor.uottawa.ca/bitstream/10393/41170/1/2005E.pdf
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    References listed on IDEAS

    as
    1. Pierre Brochu & David A. Green, 2013. "The Impact of Minimum Wages on Labour Market Transitions," Economic Journal, Royal Economic Society, vol. 123(12), pages 1203-1235, December.
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    Cited by:

    1. Mathilde Bouvier & François Roubaud & Mireille Razafindrakoto & Roberta Teixeira, 2022. "Labour market transitions in the time of Covid-19 in Brazil:a panel data analysis," Working Papers DT/2022/02, DIAL (Développement, Institutions et Mondialisation).
    2. Créchet, Jonathan & Cui, Jing & Sabada, Barbara & Sawyer, Antoine, 2024. "Why Don't Firms Hire Young Workers During Recessions? A Replication of Forsythe (The Economic Journal, 2022)," I4R Discussion Paper Series 163, The Institute for Replication (I4R).
    3. Pierre Brochu & Jonathan Créchet, 2021. "Survey Non-response in Covid-19 Times: The Case of the Labour Force Survey," Working Papers 2109E, University of Ottawa, Department of Economics.
    4. Bellatin, Alejandra & Galassi, Gabriela, 2022. "What COVID-19 May Leave Behind: Technology-Related Job Postings in Canada," IZA Discussion Papers 15209, Institute of Labor Economics (IZA).
    5. Stephen R.G. Jones & Fabian Lange & W. Craig Riddell & Casey Warman, 2023. "The great Canadian recovery: The impact of COVID‐19 on Canada's labour market," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(3), pages 791-838, August.
    6. Giovanni Gallipoli & Christos A. Makridis, 2022. "Sectoral digital intensity and GDP growth after a large employment shock: A simple extrapolation exercise," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(S1), pages 446-479, February.

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    More about this item

    Keywords

    COVID-19; Employment Flows; Labour-Market Transitions; Nonresponse;
    All these keywords.

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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