Gap between youth, adult jobless rates biggest since 1977: Statscan

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The perception that young people are worse off in today's labour market is true.

A new paper finds the gap between the jobless rates of youths and adults hasn't improved since the early 1990s, and has increased since 2010. As a result, the youth unemployment rate was 2.4 times that of workers aged 25 to 54 last year – the biggest gap recorded since 1977.

But while much ink has been spilled on unemployed (and to a lesser extent, underemployed) youth, little is known about just why they're struggling. Dipping in and out of the labour market in between attending school is one factor. But another chief reason, the Statistics Canada study finds, is that young people are twice as likely as adults to be laid off – in part because they have lower seniority.

Young workers "are more likely than adult workers to be laid off by their employers," says André Bernard of the analytical studies branch. "Youth are at higher risk of being laid off more because of their lack of seniority with the employer than because of their age."

Canada isn't the only country with a wide gap between young people and adult jobless rates. Youth in all OECD countries posted higher jobless rates than adults in 2011. Among G7 countries, the largest gaps are in Italy, the U.K., and France, while the smallest gaps are in Germany and Japan.

The widening of the gap comes as employment among young people had still not, by 2012, returned to pre-recession levels, he said. As of last year, the unemployment rate of youths aged 15 to 24 was 14.3 per cent compared with a rate of 6 per cent for adult workers aged 25 and up. (More recently, the youth jobless rate improved to 13.6 per cent).

History shows the youth jobless rate is always higher than the adult-age rate, and the participation rate of young people is generally lower because most of them are in school.

The analysis, titled Unemployment Dynamics Among Canada's Youth, is based on data from the labour force survey from 1977 to 2012.

The paper found differing patterns in joblessness between youth and adults. Among them:

• More than a quarter, or 28.1 per cent, of unemployed youth had never worked before, a much higher proportion than other age groups. “For these young people, unemployment is linked to seeking a first job and is not the result of the economic situation, unless their job search is prolonged,” it said.
• Six in 10 youth last year who held a job one month and were unemployed the next became so because they were laid off.
• The monthly layoff rate among youth was 3.5 per cent last year – more than twice the rate of 1.3 per cent for workers aged 25 to 54 and the rate of 1.5 per cent for workers aged 55 and old.
• Since 1977, the annual layoff rate for youth aged 15 to 24 has been 2 to 2.7 times that of core-aged workers.
• Youth may become jobless more quickly, but they’re also more able to find work again. Nearly a quarter of young workers who were jobless one month were able to find work the next month, a higher portion than for adult workers.
• Youth are proportionately more likely than adults to see shorter spells of unemployment (with shorter spells particularly in the 15-to-19-year-old crowd). During recession, jobless spells tend to last longer for everyone.