When Statistics Canada reported that a mere 10,700 individuals joined the workforce in November, the news definitely did not prompt economy watchers to set off any fireworks. This being said, the fact that total employment in Canada has risen by 116,800 since July after a gain of 12,400 between January and June does suggest that the country’s economic pulse is beating faster in the second half of the year than it was in the first half.
However, a closer look at the composition of the increases reveals that all of the gains since mid-year were due to a 144,800 jump in part-time hiring which more than offset a 28,000 drop in the number of full-time workers. Given that, on average, someone hired as a part-time employee does not enjoy the job security nor the benefits of full-time employees, the headline employment number paints a very ambiguous picture of the "real" health of the economy.
Although the headline employment numbers are sending a rather mixed message, one demographic group is definitely doing some heavy lifting in terms of making a disproportionately large contribution to full-time job growth in Canada.
Since the beginning of the year, employment among women 55 and over has risen by 4.8% y/y, almost five times faster than the 1% y/y increase in total employment. Despite the fact that women aged 55 and over make up just over 9% of the workforce, they have accounted for approximately 4 out over every ten jobs added over the past twelve months.
Moreover, the outsized contribution of this age group to the growth of full-time hiring is not a recent phenomenon. Indeed, since 2000 the percentage of females over 55 in the workforce has more than doubled from 4.2% to 9.6%, its current value.
Several factors appear to be contributing to this relatively rapid growth of employment of women aged 55 and over relative to other age groups. First, the steady, gradual aging of the post-Second World War baby boom has caused the percentage of both sexes in the labour force over 55 to trend steadily higher since 1996. At the same time, because they were enjoying better health and had a longer life expectancy, the percentage of both men and women choosing to delay retirement has risen over the past twenty years.
However, since 1996 the percentage of women over 55 staying in the workforce has accelerated from 16% to its current level of 31.1% while the employment rate for men over 55 has exhibited a more gradual rise from 29% in 1996 to its present level of 40.7%.
At the same time, due to a sharp drop in the birth rate between 1961 and 1966, the rate of growth of the 15 to 24 age group, the source of the majority of new entrants to the labour force, has fallen from a high of 2.7% y/y in 1974 to its current rate of -0.5% y/y. Faced with this shrinking supply of younger workers, employers are increasingly retaining older more experienced workers who are postponing retirement because they are healthier and living longer. Given this increase in labour demand and the increased supply of women over 55, it’s not surprising that their participation in the workforce has trended steadily higher since 2000.
Looking forward, a number of indicators suggest that the share of women over 55 in the workforce will continue to trend higher for several years. First, the "birth dearth" over the past 25 years will continue to depress the number of individuals aged 15-24 entering the labour force. Second, given the increase in life expectancy, an increased percentage of mature female and male workers are expressing a desire to continue to remain in the workforce beyond age 55.
Finally, employment of women over 55 should benefit from the relatively faster growth of the service sector relative to goods production, since the former employs 89% of women aged 55 and over compared to 70% of men in that age group.