1 Economic indicators 2nd part : The labour market v1.0

,9 Pop 15 year old and more (potentially economically active) ,7 Labour force 1325 Unemployed ,7 Employed 9 657,2 Inactive Pop Labour Force Survey LFS for Canada september 2013 (thousands of persons)

,9 Les 15 ans et ,4 Population active 1 258,8 Chômeurs ,6 Employés ou personnes occupées 9 938,5 Inactifs L’enquête sur la population active, novembre 2014 (chiffres en milliers) Selon Statistique Canada

4 What are the key indicators of the labour market ?

5 The Labour market data in Canada comes from The monthly Labour Force Survey LFS Sampling households

6 Unemployed or not? In the monthly Labour Force Survey LFS, the following questions are asked. Do you currently hold a job? No Do you want to work? Yes Are you making efforts to find a job? Yes If you answered the above answers, you are considered unemployed by Statcan.

7 What are the types of unemployment? Frictional Structural Cyclical Seasonal

Frictionally unemployed person He has skills that are in demand in the labour market. He is looking for a job and should find work quickly. 8

A structurally unemployed person His skills are not in demand in the labour market. It may be a long job search. He may become inactive (discouraged worker) 9

Cyclically unemployed person When someone loses his job because of a recession or of an economic downturn, he becomes cyclically unemployed. This is the only type of unemployment that can be completely eliminated. 10

11 What are the difficulties in interpreting the unemployment data? 1)Bias in the survey’s answers example: Someone who just lost his job and did not start looking for work. Is he going to tell the interviewer ?

2) Discouraged job seekers can distort the interpretation of changes in the unemployment rate. In economics, a discouraged worker is a person of legal employment age who is not actively seeking employment or who does not find employment after long-term unemployment. This is usually because an individual has given up looking or has had no success in finding a job, hence the term "discouraged". 12

A village Imagine a village where we have: 90 workers 10 unemployed persons 60 inactive persons What is the unemployment rate? 13

6 months later … Now we have: 90 workers 8 unemployed persons 62 inactive persons Two of the 10 unemployed persons lose faith in the job market and become discouraged workers, the unemployment rate decreases ??? 14

The unemployment rate has declined, but we don’t observe more jobs than before! 15

1 year later … A new business just sets up in the village, the figures become : 100 workers 13 unemployed persons 47 inactive persons 16

Now the unemployment rate increases while more people are working … The labour force increased (less discouragement, students joining the labour force,...) 17

18 3) Geographically, the statistics are not homogeneous. Unemployment rates: February Canada= 7.2% 6,3% Terre-Neuve = 11.7%14,8% Alberta = 4.5 %3,4% Québec = 7.4 % 6,3% Ontario = 7.7 %6,3%

What is full employment? The unemployment rate never reaches 0%, but we can still achieve full employment 19

In monetarist economics, particularly the work of Milton Friedman, NAIRU is an acronym for non-accelerating inflation rate of unemployment, and refers to a level of unemployment below which inflation rises. It is widely used in mainstream economics. It was first introduced as NIRU (non-inflationary rate of unemployment) as an improvement over the "natural rate" of unemployment concept 20

Output gap = Output – Potential output 21

For various reason, every day people lose their jobs and even for the most qualified, a job search always requires some time. Therefore there is always some unemployment. 22

The natural rate of unemployment is the unemployment rate which corresponds to full employment. It is not defined by a specific rate but rather by a situation. 23

Full employment is reached when cyclical unemployment has been completely eliminated. Then the unemployment rate is at its natural rate. 24

Changes in the unemployment rate in Canada 25

26 What are the economic and social costs associated with unemployment periods? Production loss (income) - irrecoverable Health problem Criminality Increased public and private spending

A theoretical explanation of unemployment 27

28 Technological progress and unemployment  technology   employment  productivity  profits   purchasing power of shareholders  prices   purchasing power of consumers  wages   purchasing power of workers  purchasing power   demand for goods & services  production   employement Uncertain, but...

Emploi au Canada Source:

Source: 30

Source: 31

Source: 32

Source: 33

Source: 34

Emploi au Canada Source:

Taux de chômage Canada vs Québec Source:

Taux de chômage Canada vs Québec Source:

Source: selon-lage-et-selon-le-sexe selon-lage-et-selon-le-sexe 38

Source: selon-lage-et-selon-le-sexe selon-lage-et-selon-le-sexe 39

Taux de chômage Canada vs US Certaines différences conceptuelles ont pour effet de gonfler le taux de chômage au Canada par rapport à celui des États-Unis. Ainsi, Statistique Canada classe notamment parmi les chômeurs les personnes qui recherchent un emploi de façon passive (p. ex., en lisant les petites annonces) ainsi que celles qui commenceront à travailler prochainement, alors que le Bureau of Labor Statistics des États-Unis exclut ces deux catégories de ses calculs. De plus, la méthode de calcul canadienne inclut les personnes âgées de 15 ans, dont le taux de chômage est supérieur à la moyenne, tandis que la méthode utilisée aux États-Unis n'en tient pas compte. Source:

Taux de chômage Canada vs US 41

Taux de chômage US 42 Source:

Taux de chômage Canada vs US 43

Taux de chômage US 44 Source:

Durée du chômage US 45 Source: