Structural Influences on Participation Rates: A Canada-U.S. Comparison



Chart 8 Participation and employment rates, both sexes,
in Canada and the United States


Canadian participation rate Canadian employment rate
= U.S. participation rate
= U.S. employment rate


Note: Canadian data for 15-19 year olds; U.S. data for 16-19 year olds.


Further disaggregation of this group strength-
ens the case that, while this process is not yet
over, additional ratcheting upward will be much
smaller. In the United States, participation rates
for women with children under 18 have been ris-
ing faster than those of other women, with the re-
sult there has been a considerable shrinking of the
difference between the rates of these two
groups.20 The other source of growth in the rate
for U.S. core-age women since the mid-1980s has
been in the group aged 45-54 without children.
The degree of convergence of the rates for these
sub-groups, as well as the rates for men and
women, has already been considerable. In addi-
tion, the proportion of the year that women have
been spending in the workforce on average has
now reached 11 months compared with 11.5
months for men.21 These developments indicate
there is less room for growth in the participation
rate for women aged 25-54. Similar movements
appear to have been taking place in Canada. In
fact, the rate for women aged 25-44 is now higher
in Canada than in the United States. However, the
rate for the 45-54 age group in Canada, which rose
significantly in the 1990s, is still below that for
U.S. women of the same age and below that for
Canadian women aged 25-44. There may, thus, be
more room for the participation rate of Canadian
women to rise than for women in the United
States, despite the fact that the rates for Canadian
and U.S. core-age women were virtually identical
in 1997.

One explanation for the tendency for women’s
participation rates to increase while men’s stag-
nate or decline may be that women are more flex-
ible over the kind of jobs they will fill. For exam-
ple, there is some evidence women’s greater
willingness to take low-paying jobs, for which
they are overqualified, while they are juggling
work and domestic duties.22 The relatively
greater rise in full-time school attendance rate for
young women than for young men, may also be
responsible for a stronger influence on the partici-
pation rate for women in the core group.

In Canada, changes to EI may eventually
weaken labour force attachment with the result
that a cyclical increase in the overall employment
rate for those in the core group may not be accom-
panied by as much of a rise in the participation
rate. By 2006 the participation rate of the core-age
group appears to have room to move to about
three percentage points above the 1996 level but
only if male rates rise slightly (say by one percent-
age point). The U.S. Bureau of Labor Statistics as-
sumes the male rate in the United States will de-
cline over the next decade, and projects a 1.7
percentage point increase in the total core-age rate
from 1996 to 2006 (Fullerton, 1997: Table 4).

Youth: Ages 24 and under

Participation rates are more cyclical for youths
than for adults but, if a large part of the increase in
school attendance rate is structural, the participa-
tion rates may not return to the peak level of the
late 1980s any time soon. For the United States,
that development would be a continuation of a
pattern that was evident in the 1980s for teens and
men aged 20-24.

Teens: 19 years and under

The labour market experiences of teens (15-19
in Canada, 16-19 in the United States) and young
adults (20-24) are sufficiently different to warrant
separate treatment here.23

In both Canada and the United States, the at-
tachment of teenagers to the labour force is rela-
tively weak, driven largely by job opportunities.
Their participation rates are, therefore, very cycli-
cal, tracking their employment rate very closely
for some time (Charts 8 and 9). This is not surpris-
ing since, during the school year, most teens are in
school full-time and thus available for few hours
of work each week.25

Canadian Business Economics

Summer 1999




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