Workers Laid-Off During the Last Three Recessions: Who Were They, and How Did They Fare?

Abstract:     
Over the last three decades, Canada has experienced three recessions: one that started during the early 1980s; a second that began during the early 1990s; and the most recent one, which led to employment declines starting in October 2008. For each recession, this study: a) examines which workers were laid-off; b) quantifies layoff rates; and c) assesses the proportion of workers that found a job shortly after being laid-off. The layoff concept used includes temporary layoffs as well as permanent layoffs.

The study shows that the most recent recession was associated with lower layoff rates and higher short-term re-employment rates (following layoffs) than the previous two recessions. It was also of shorter duration. Total employment took 27 months to return to its pre-downturn level, compared to 53 months during the early 1990s and 40 months during the early 1980s. While newly hired workers had a higher risk of layoff than high-seniority workers during all three recessions, the former saw their layoff rates drop significantly during the most recent downturn. In contrast, layoff rates of high-seniority workers did not fall during the most recent downturn. As a result, high-seniority workers a group that tends to experience substantial and sustained earnings losses accounted for a greater share of all laid-off workers during the most recent downturn than during the downturns of the early 1990s and of the early 1980s.

Number of Pages in PDF File: 45

Keywords: worker displacement, layoffs, employment, job loss, wage losses

JEL Classification: J6, J63, E24, J2

working papers series