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Study: The effect of labour demand on regional demographics, 2001 to 2015

Released: 2018-01-24

A new Statistics Canada study shows that, in the medium term, the primary working-age population of economic regions in Canada―that is, the population of individuals aged 15 to 64―adjusts significantly to economic shocks through labour mobility.

Simple economic models suggest that regions that experience prolonged periods of negative economic growth will also experience population losses as working-aged individuals leave to find employment elsewhere. Periods of strong economic growth are expected to have the opposite effect. While economic theory provides guidance on the direction of change, the expected magnitude of this change for Canada is not well understood, particularly over longer time periods.

This study builds on a recent Statistics Canada analysis which showed that a minority of unemployed individuals are willing to move to other regions each year. In contrast, this study shows that the amount of inter-regional labour mobility that takes place over periods of several years is significant. The study estimates that over two seven-year periods―from 2001 to 2008 and from 2008 to 2015―a 5.0% decline in regional labour demand reduced the regional working age population by 4.5% to 6.0%, on average.

Regional populations of younger individuals aged 15 to 34 responded to changes in labour demand to a greater degree than did regional populations of workers aged 35 to 64. This finding is consistent with the view that younger workers leave economically declining regions or migrate to expanding regions at a greater rate than do older workers.

As a result, a 5.0% decline in labour demand was also found to raise the demographic dependency ratio―the number of individuals under 15 or over 64, divided by the population aged 15 to 64―by 1.1 to 1.5 percentage points, on average. Alternatively, a 5.0% increase in labour demand was found to reduce the demographic dependency ratio in economically dynamic regions by a similar amount.

In the current context of tighter labour markets, these results highlight the key role that employment dynamics may play in altering the relative demographics of regions across Canada.

Products

The research article, "The Effect of Labour Demand on Regional Demographics," which is part of Economic Insights (Catalogue number11-626-X), is now available.

The study "Barriers to Labour Mobility in Canada: Survey-based Evidence," also part of Economic Insights (Catalogue number11-626-X), is also available.

Contact information

For more information contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca).

To enquire about the concepts, methods or data quality of this release, contact René Morissette (613-951-3608 rene.morissette@canada.ca), Social Analysis and Modelling Division.

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