Chart 2 Female participation rates in Canada and the
United States
™ Canada " United States
Chart 3 Male participation rates in Canada and the
United States
Male participation rates fell slightly over the
1980s (Chart 3).
The 1990s, however, appear to have initiated a
radical departure in the evolution of the participa-
tion and employment rates in the two countries.
Both these rates fell more in Canada than in the
United States during the 1990-91 recession, partly
because economic growth was relatively stronger
in Canada than in the United States before 1990
and the recession of 1990-91 was more severe.
However, while the U.S. participation rate had be-
gun to recover by 1994 and has since risen to a
new high, the Canadian rate continued to fall until
1995 and showed no sign of recovery until 1998.
In the United States, female rates are once again
responsible for the rise in the total participation
rate as those for male rates have drifted down
since 1992. The rate of increase of the female par-
ticipation rate has, however, been considerably
lower than in the 1980s. In Canada, female rates
were almost one percentage point higher in 1998
than in 1995 but the further slippage in male rates
offset much of this uptick.
Cyclical influences can account for short-run
changes in the both male and female participation
rates in the two countries. For example, over the
past two decades or so, the rates either fell or
stalled in the recessions. The response to recover-
ies is, however, less clear. In the United States, the
rate of increase in female rates slowed in each of
the expansions of the 1980s and the 1990s, while
at the same time male rates continued to decline.
In Canada, female rate increases also moderated
during the vigorous expansion of the 1980s, while
male rates stalled and both have been fairly flat
since 1994. Structural factors are more likely to have
been behind such longer term developments.
We examine first some of the demographic fac-
tors that may have influenced the aggregate par-
ticipation rate. We then undertake a disaggre-
grated analysis of some of the possible structural
influences on major age and gender groupings for
both Canada and the United States. The groups
considered are the core labour force (ages 25-54),
youth (ages 15-19 and 20-24) and older people
(age 55 and over). Our main conclusion is that an
increase in the aggregate participation rate should
be expected over the medium term, but it is un-
likely to return to its 1989 peak level or to track the
U.S. rate as closely. The greatest uncertainty sur-
rounds the direction of the participation rate for
adult men in general and of those aged 55 and
over in particular.
Demographic and
Compositional Effects
The participation rate fell by 2.7 percentage
points from 1989 to 1997 in Canada compared
with an increase of 0.5 percentage points in the
United States. Although much of this difference is
because of Canada’s worse cyclical performance,
some of it may be explained by demographic de-
velopments and shifts in the composition of the
population of labour force age.
Canadian Business Economics
Summer 1999