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Youth Unemployment in Canada: Challenging Conventional Thinking?

  • Elena Simonova

    ()

    (Certified General Accountants Association of Canada)

  • Rock Lefebvre

    ()

    (Certified General Accountants Association of Canada)

Registered author(s):

    In the aftermath of the recent recession, the issue of youth unemployment has rekindled significant unease with different levels of government, communities and the general public. In addition to the most common consequences of unemployment such as financial hardship and emotional distress, jobless youth may experience erosion of individual skills and knowledge. The erosion of skills may likewise be caused by underemployment which does not allow youth to utilize the full range of skills possessed. At the aggregated economic level, such an erosion of skills may disadvantage business in their ability to expand and compete. This paper aims to examine the level of hardship associated with youth unemployment and the presence of youth underemployment in the Canadian economy. The results of the analysis show a number of positive trends: the youth unemployment rate trends downward while expected demographic changes may further ease youth joblessness; youth unemployment is primarily short-lived and often reflects a transitory state between school and the labour market. On the other hand, youth underemployment is significant and manifests through the underutilization of skills and labour. The capacity of the economy to tap into the enlarged pool of better educated youth does not keep pace with the improvements in educational attainment; underutilization of youth skills is common and extensive in specific occupations; and the proportion of youth that are involuntary part-timers is on the rise.

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    File URL: http://ideas.cga-canada.org/WorkingPapers/121003.pdf
    File Function: First version, 2012
    Download Restriction: no

    Paper provided by Certified General Accountants Association of Canada in its series Working Papers with number 121003.

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    Length: 63 pages
    Date of creation: Oct 2012
    Date of revision:
    Handle: RePEc:cga:wpaper:121003
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    1. Lars Osberg & Zhengxi Lin, 2000. "How Much of Canada's Unemployment is Structural?," Canadian Public Policy, University of Toronto Press, vol. 26(s1), pages 141-157, July.
    2. Bell, David N.F. & Blanchflower, David G., 2010. "Youth Unemployment: Déjà Vu?," IZA Discussion Papers 4705, Institute for the Study of Labor (IZA).
    3. Danny Leung & Shutao Cao, 2009. "The Changing Pace of Labour Reallocation in Canada: Causes and Consequences," Bank of Canada Review, Bank of Canada, vol. 2009(Summer), pages 31-42.
    4. Kahn, Lisa B., 2010. "The long-term labor market consequences of graduating from college in a bad economy," Labour Economics, Elsevier, vol. 17(2), pages 303-316, April.
    5. Macdonald, Ryan, 2007. "Not Dutch Disease, It's China Syndrome," Insights on the Canadian Economy 2007017e, Statistics Canada, Economic Analysis.
    6. Borghans,L. & Grip,A.,de, 1999. "Skills and low pay: upgrading or overeducation?," ROA Research Memorandum 005, Maastricht University, Research Centre for Education and the Labour Market (ROA).
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