Overview
| Name | Alberta's Occupational Demand and Supply Outlook and Alberta Regional Occupational Demand Outlook |
| Author | Alberta Labour and Immigration |
| Contact | lfs.analyst@gov.ab.ca |
| Timing | Alberta's Occupational Demand and Supply Outlook: 10-year forecast, updated every two years
Alberta Regional Occupational Demand Outlook: 5-year forecast, updated every two years |
| Outputs | Reports available here |
Alberta produces two occupational demand and supply outlooks. The Occupational Demand and Supply Outlook, provincial in scope, produces 10-year forecasts. The Regional Occupational Demand Outlook produces 5-year forecasts for eight economic regions and the province overall. Both outlooks share the same methodology, presented below.
Additionally, the Short-Term Employment Forecast (STEF) provides a 3-year overview of occupations expected to be in-demand but does not show potential labour shortages.
Methodology
Projection of Job Openings
An in-house macroeconomic model, developed by the Alberta Treasury Board and Finance, informs both labour outlooks. This model is used to develop Gross Domestic Product (GDP) forecasts by industry according to the Canadian System of National Accounts. Forecasts by industry are then allocated to industry categories within the North American Industry Classification System (NAICS) 2017. The result is as follows:
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- Gross Domestic Product (GDP) by industry (for 1-digit NAICS), by year (not public) (A).
For each occupation and each year, expansion and replacement demand are forecast and summed as the demand projection (also known as "job openings" in other models).
Expansion Demand
Expansion demand for an occupation refers to its change in employment from one year to the next, which may be positive or negative. To compute this demand, the macroeconomic model is used to estimate employment by industry related to the forecast GDP by industry. The result is as follows:
- Employment by industry (1-digit NAICS), by year (not public) (B).
Employment by industry is then allocated to occupations from the National Occupational Classification (NOC) based on historical data (Statistics Canada, custom request) and the in-house model. The industry-occupation mix (used to map employment to occupations) from the latest census is assumed to be constant over the projection period. The result is as follows:
- Number of job openings in new positions by occupations (mix of 1-, 2-, 3- and 4-digit NOC), by year. This is also called the expansion demand (not public) (C).
Replacement Demand
Replacement demand refers the number of workers retiring, dying or otherwise leaving the labour force each year. The model projects these categories based on the demographic profile of each occupation, migration, assumptions and trends in participation rates using Statistics Canada’s Census and Labour Force Survey data.
Retirement rates in Alberta, at an aggregate occupational level, are derived from the Labour Force Survey (LFS) and the Alberta Treasury Board and Finance population projections. Retirement by occupation uses the age distribution in that occupation given in the latest census. As workers in a specific occupation enter older age cohorts, a larger share will retire. Retirement rates vary by age group, rising over time toward the long-term trend.
Other labour force separation rates, assumed to be constant over the forecast period, are derived from the LFS data. Out-migration and death rates are assumed to be the same for those employed as for the general population in each age/gender group. This is the result:
- Level of replacement demand by occupation (4-digit NOC), by year (not public) (D).
The sum of expansion demand and replacement demand provides the following calculation:
Demand projection by occupation (494 of the 4-digit NOC), by year (available here) (E).
Projection of Job Seekers
The occupational labour supply is projected using a stock-flow approach. The model estimates the entry and exit of labour added to the existing stock of labour from the previous period. This is carried out by forecasting a detailed age-specific profile of Alberta based on distributions of sex, educational attainment, field of study and migration.
The labour supply in an occupation is equal to the supply in the previous period PLUS labour force entrants from the school system and in-migration MINUS labour force separations through retirement, death and outmigration. The supply model also considers vertical movements between occupations with different educational requirements within the same field as well as those re-entering the labour force after exiting it due to illness, discouragement or other causes (not retirement, death or outmigration).
Three streams of labour supply (job seekers) are estimated as follows: 1) in-migration (international and interprovincial), 2) school leavers and 3) other re-entrants. Population levels by age and gender are determined by a detailed population forecast by single-year age cohorts.
Supply from Migration
Migration flows are forecast by age and sex internationally and interprovincially. Migrants are mapped to occupations using age- and sex-specific participations rates and migration-occupation matrices from Statistics Canada. The result is as follows:
- Number of migrants seeking jobs by occupation, by year (F).
Supply from School Leavers
Growth in the labour force of each occupation is forecast by estimating trends in educational attainment and field of study. This qualifies the population in various fields, allowing the in-house model to project which occupation each graduate will enter based on Statistics Canada's census labour data that links educational attainment and field of study to occupation. New labour force entrants from the school system are categorized as "school leavers."
School leaver projections are built from enrollment and graduation data by educational attainment, major field of study and gender. Data from the Canadian Institute for Health Information (CIHI) and Alberta’s Ministry of Health are also used to improve the quality of occupational projections.
Enrollments are forecast for five levels of education: 1) some high school, 2) high school, 3) post-secondary degree, 4) non-degree apprenticeship and 5) non-degree non-apprenticeship. At the post-secondary level, enrollment is forecast at the aggregate level for each major field of study and by age and sex based on historic trends. The rate at which each subset of the population enrolls in school programs is held constant over the forecast.
Graduation rates are forecast based on historic trends of the number of graduates as a share of the number of enrollments. Post-secondary dropouts are assumed to enter the labour force at a level of educational attainment equivalent to a high school diploma. High school dropouts enter the labour force with "less than high school."
The number of international post-secondary students is obtained from the Alberta Ministry of Advanced Education. Since not all international graduates are able to enter the Canadian labour force immediately, a portion, based on Statistics Canada estimates, is assumed to leave the country. The result is as follows:
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- Number of graduates seeking jobs by occupations, by year (G).
Supply from Other Re-entrants
The final component of occupational supply is defined as all labour force entrants and exits not captured in other parts of the model. These include occupational mobility (movements between occupations) and labour force re-entrants.
Other potential workers re-entering the workforce are estimated based on Statistics Canada data and the in-house model. From the historical labour force and supply flow by occupation, the historical value of other re-entrants is obtained by taking the change in the labour force minus the supply flow and its forecasted value is then estimated. Other re-entrants are then allocated by occupation using employment shares. The result is as follows:
- Number of other re-entrants seeking jobs by occupations, by year (H).
Finally, supply from migration, school leavers and other re-entrants are summed:
- Labour supply projection by occupation, by year (available here) (I).
Identification of Imbalances
Labour demand (E) and labour supply (I) are used to calculate labour shortages as the difference between net labour demand (change from one year to another) and net labour supply.
The result is as follows:
- Cumulative shortage by occupation (494 of the 4-digit NOC), by year (results available here)
A negative forecast indicates a labour surplus; a positive number indicates a labour shortage.
Applications
These forecasts, distributed through the Government of Alberta website and ALIS, are used in various ways by the Government of Alberta, employers, job seekers, educational institutions, training providers, students, youth, career counsellors, newcomers, and prospective immigrants.
Employment Policies and Programs
- Alberta Supports and Alberta Labour and Immigration use the information in their employment services.
- Career centres and career counsellors, such as Alberta Supports, use the outlooks to inform employment and career advice to their clients.
- Albertans, through the ALIS website, use the results to help them make decisions about education, jobs and careers.
Immigration Policies and Programs
The model informs government policies regarding immigration and temporary foreign workers, such as the Alberta Immigration Strategy and the Alberta Immigrant Nominee Program.
Education
- Post-secondary institutions - such as the Northern Alberta Institute of Technology and the Southern Alberta Institute of Technology - use the results to help develop new programs and design curriculum.
- The government uses the forecasts to guide decisions on funding new educational programs.
- Alberta Advanced Education uses the results to make informed decisions on educational program funding applications from post-secondary institutions.
- Students and others use the forecasts to develop career plans and make career choices.
Economic Development
The government uses this data to inform its economic diversification programs and investment attraction initiatives.