Small area estimates of employment and unemployment rate for self-contained labour areas, November 2021 to June 2024
Released: 2024-09-17
Today, Statistics Canada released new data employing small area estimation methods to enhance the availability of labour force characteristics for sub-provincial areas, including census metropolitan areas (CMAs), census agglomerations (CAs), and a complementary geography called self-contained labour areas (SLAs). SLAs are functional areas composed of census subdivisions outside of CMAs and CAs, grouped according to commuting patterns derived from data on place of work from the Census Program.
This small area estimation method uses modelling techniques to combine estimates from the Labour Force Survey (LFS) with auxiliary data from Employment Insurance Statistics and demographic population projections. Small area estimates improve data availability and the precision of estimates, supporting more effective development and evaluation of employment policy in smaller communities and rural areas.
Small area estimation improves data availability for small towns and rural areas
Using small area estimation, modelled estimates of employment and the unemployment rate are now available for areas in which the LFS sample size is too small to produce reliable estimates. Currently, the most detailed level of geography available from the LFS in many provinces is the economic region: a grouping of census divisions created as a standard geographic unit for the regional analysis of economic activity. Under the 2016 Standard Geographical Classification, there are 76 economic regions, compared with more than 600 CAs and SLAs. Local, granular data allows for a deeper understanding of the diverse labour markets, which often encompass both cities and rural areas with distinct economic dynamics.
For example, small area estimation data reveal notable variations in employment rates across the different types of areas. Among SLAs—representing small towns and rural areas—the median employment rate was 54.9% in June 2024, with half of the areas having employment rates between 48.3% and 57.9%. In comparison, among CMAs—cities with populations of at least 100,000—the median employment rate was 62.6%, with half of the areas having employment rates between 61.0% and 64.8%.
Infographic 1
Distribution of employment rates by type of area, June 2024
Small area estimation improves the precision of estimates
Small area estimation also presents an alternative method to study the labour market in larger cities, such as CMAs. The LFS is designed to produce CMA estimates as three-month moving averages to reduce irregular movements caused by relatively small sample sizes. By leveraging modelling techniques, small area estimation can provide improved precision of monthly estimates for CMAs compared with LFS estimates. Furthermore, because all data are from the reference month, small area estimates can be more responsive to changing economic conditions, allowing for better analysis of trends.
Note that the production of small area estimates depends on the availability of external data for the reference period, and as such, the small area estimates are less timely than LFS estimates.
Chart 1
Comparison of Labour Force Survey and small area estimates of unemployment rate and standard error in Barrie, Ontario census metropolitan area
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Note to readers
As part of the Disaggregated Data Action Plan, a small area estimation methodology has been developed to produce monthly estimates of some labour force characteristics for more detailed levels of geography than are those available directly from the Labour Force Survey (LFS), namely census metropolitan areas (CMAs), census agglomerations (CAs), and a complementary geography called self-contained labour areas (SLAs). Small area estimation methods produce reliable estimates when the sample size in the area is small by modelling the small amount of survey data from the LFS with auxiliary data from Employment Insurance Statistics and demographic projections. For more information, see "Small Area Estimation Methodology Using Labour Force Survey Data."
A census metropolitan area (CMA) is formed by one or more adjacent municipalities centered on a population centre known as the core. A CMA must have a total population of at least 100,000 of which 50,000 or more must live in the core.
A census agglomeration (CA) is formed by one or more adjacent municipalities centered on a population centre known as the core. A CA must have a core population of at least 10,000 based on data from the previous Census of Population Program.
A self-contained labour area (SLA) is a functional area composed of census subdivisions (CSD) which are not already included in a CMA or CA. The grouping of CSD is determined using commuting flows derived from data on place of work from the Census Program. For more information on SLA, see "Delineating Functional Areas in All Territories," Organisation for Economic Co-operation and Development (2020).
The employment rate is the small area estimate of the number of employed persons expressed as a percentage of the population 15 years of age and older.
The unemployment rate is the number of unemployed people as a percentage of the labour force (employed and unemployed).
Coverage
Excluded from the coverage of the estimates are persons living on reserves and other Indigenous settlements in the provinces, full-time members of the Canadian Armed Forces, the institutionalized population, and households in extremely remote areas with very low population density. These groups together represent an exclusion of approximately 2% of the population aged 15 and older.
Small area estimates for the territories are not available.
Seasonal adjustment
Estimates in this release have not been adjusted for seasonality and may be subject to regular seasonal variations. For more information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.
Next release
Small area estimates for July 2024 will be available on October 11 with the September Labour Force Survey release.
Products
More information about the methodology of the small area estimates of labour force characteristics are available online in "Small Area Estimation Methodology Using Labour Force Survey Data" (75-005-M).
The product "Labour market indicators, census metropolitan areas, census agglomerations and self-contained labour areas: Interactive dashboard" (71-607-X) is also available. This dashboard allows users to visually explore the estimates using an interactive map as well as time series charts and tables.
The product "Rural Data Viewer" (71-607-X) has been updated to include the small area estimates of employment and unemployment rate. This Web application presents an interactive rural data visualization to help illustrate key information derived from statistical programs.
Contact information
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).
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