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Future of Work

A curated resource of recent research on trends shaping Canada's labor market.

After the shocks: Preventing long-term labour market scarring for youth

Key Takeaway
The long-term impacts of economic shock disproportionately affect young people who already face barriers to entering the workforce.


This report highlights the impact of economic shocks on young people in the labour market.

The authors identify distinct challenges that young people, particularly recent graduates, experience during and after economic downturns. It can be a long-term struggle for youth to overcome these challenges. The short-term effects of economic shocks include reduced hours and wages, and job losses. Over time, these can lead to lasting negative impacts on earnings and career opportunities, which is known as “labour market scarring.”

The paper also emphasizes that labour market scarring is felt disproportionately by young people who already face barriers to successfully entering the workforce.

The authors point out that dealing with the short-term impacts of economic shocks tends to be of primary concern to policymakers. However, policy responses focused on the longer-term impacts—such as labour market scarring—could be more consequential and therefore deserve more attention.

The authors conclude the report with several policy recommendations.

September, 2023 | Finlayson, J. Globerman, S.
Key Takeaway: Public policies that promote higher employment rates and increased labour productivity of immigrants would strengthen the linkages between rising numbers of immigrants and real economic growth.
September, 2023 | Marwah, S., Omidvar, R., Yussuff, H., Woo, Y. P
Key Takeaway: Canada’s International Student Program requires careful policy attention to maintain its integrity and the well-being of students.
July, 2023 | Bartlett, R.
Key Takeaway: Labour market trends must be considered when making decisions about immigration levels.
May, 2023 | Frenette, M.
Key Takeaway: The realities of market supply and demand, not cognitive skills, represent the most likely explanation for earnings disparities among post-secondary graduates in different fields.
October, 2023 | Lee, J., Brown, O., & Zon, N.
Key Takeaway: The long-term impacts of economic shock disproportionately affect young people who already face barriers to entering the workforce.
September, 2023 | Lockhart, A.
Key Takeaway: Despite being a leader in AI research, Canada is lagging in adopting the technology.
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