British Columbia Labour Market Outlook
Overview
| Name | British Columbia Labour Market Outlook |
| Author | Ministry of Post-Secondary Education and Future Skills; Labour Market Information Office |
| Contact | Jacqueline Storen, Director of Forecasting, jackie.storen@gov.bc.ca |
| Timing | 10-year forecast, updated annually |
| Outputs |
Datasets available on British Columbia's Data Catalogue |
| Additional documentation | Key definitions |
The British Columbia Labour Market Outlook estimates labour demand for the 5121 5-digit National Occupational Classification (NOC) 2021 unit groups for 64 industries plus aggregates and special sectors for seven economic regions2 and the province. Labour supply indicators are provided for the 512 5-digit NOC occupations for four aggregated regions3 and the province.
Methodology
The British Columbia Labour Market Outlook draws upon the Stokes Economics (“Stokes”) econometric model for demand and supply forecasts, along with in-house models and assumptions to better understand the allocation of demand and supply by industries, occupations, and regions.
Projection of Labour Demand
For each of the 512 occupations and each year of the 10-year forecasting period, expansion and replacement demand are forecast and summed as the number of job openings.
Expansion Demand
In-house Employment Projection
First, employment by industry for B.C. is forecast using an in-house model. The model uses several different time series forecasting techniques and adjustments to reflect historical employment trends, stakeholder consultations or specific industry research. Forecasts from other ministries are also incorporated, such as teachers’ employment based on student enrollment forecasts and energy sector employment from energy production forecasts. Assumptions about major infrastructure projects are aligned with the assumptions used by the BuildForce Canada B.C. Advisory Committee.
Prior to developing the forecast, the last few years of historical employment estimates are analyzed to determine whether they accurately represent the current labour situation and to what extent the estimates are impacted by survey error. This analysis is then used to establish the best jumping-off point for the first forecast year. In order to best control for survey error, and to minimize the impact of transitioning from historical estimates to the forecast, the base year of the forecast is itself forecasted, rather than use historical data.
Stokes Employment Projection
The Stokes econometric model also provides an employment by industry forecast. The Stokes model uses historical economic, income, and employment data from Statistics Canada, as well as major projects data from the B.C. Ministry of Post-Secondary Education and Future Skills. To align the Labour Market Outlook with other forecasts developed by the Government of B.C., the population projections from BC Stats and the budget forecast from the B.C. Ministry of Finance are provided as inputs to the Stokes model.
Next, historical productivity is estimated by dividing industry-specific GDP by employment and the productivity by industry forecast follows. Applying the forecast productivity rates to the forecast GDP, a first-round estimate of employment for the 15 major industries is obtained. The employment forecast is then further split into 64 detailed industries based on trend productivity growth assumptions. The original forecasts from the Stokes model are then calibrated to reflect the views of the internal forecast from the in-house model.
The results are as follows:
- Number of employed for 64 custom industries (2, 3 or 4-digits by NAICS 2017), seven regions and B.C., by year (available here, see Employment by Industry for B.C. and Regions) (A).
Employment and Job Openings Due to Expansion by Occupations
Finally, the share of employment of each of the 512 5-digit NOCs within each of the 64 industries is estimated using custom data from the Statistics Canada’s 2021 Census. For most occupations, the share of occupation by industry is assumed to be constant and equal to the 2021 share over the projection period. For a limited number of occupations, the projections are adjusted manually based on existing administrative and survey data and studies. The results are as follows:
- Number of employed for 512 5-digit NOC occupations for seven regions and B.C., by year (available here)4(B).
The number of job openings due to expansion by occupation and region is also calculated as the sum of change in employment between two consecutive years and a normal level of unemployment. The normal level of unemployment is one of the Stokes model variables (see Box 1 and Stokes’ methodology for more information ). The results are as follows:
Replacement Demand
The number of job openings in existing positions - replacement demand - is estimated for each occupation and year of the forecasting period. Replacement demand is generated by two types of departures: retirement and in-service death.
Death rates are provided by the Stokes model. The model first derives death rate by age group from Statistics Canada population estimates. It then assumes that death rates are identical across occupations. Finally, rates are forecast based on BC Stats demographic projections (available here).6
Retirement rates by occupation are estimated by fitting a retirement distribution around the median age of retirement by occupation. Retirement rates are then forecast over the period based on subjective assessments of retirement trends.
Labour force by occupation is then estimated as the sum of the employment (B) and unemployment forecasts provided by the Stokes model.
Death and retirement rates are applied to the forecast labour force by occupation to estimate deaths and retirements over the forecast period. The results are as follows:
Total Job Openings
Finally, the number of job openings by occupation and year can be written as the sum of expansion demand (C) and replacement demand (D). The expansion and replacement job openings by occupation are also allocated back to industries based on the proportion of each occupation in each industry.
Projection of Labour Supply
The projection of job seekers calculation considers four streams of labour supply:
- New entrants
- Net international migration
- Net interprovincial migration
- Net other mobility
Supply from New Entrants
The number of new entrants (i.e., young people starting work) refers to the population aged 17-29 years old entering the labour force for the first time. The number of new entrants by occupation is provided by Stokes, which applies its forecast for age-group-specific labour force participation rates to the BC Stats population projections (more information here) and then allocates them to occupations based on the relative demand (i.e., total number of job openings (E)) for each occupation.
The results are as follows:
Supply from Net International Migration
Net international migration by 10-year age groups is based on the population projections from BC Stats (more information here) for the four regions plus B.C. overall. Next, participation rates by single year of age are applied to calculate the flow of labour supply (labour force) coming from international immigration. It is assumed that the participation rates of new immigrants by age will be identical, over the projection period, to that of recent immigrants (i.e., five years or less) according to the 2021 Census.
International immigrants are then allocated to occupations by considering two factors:
- initially, new immigrants’ occupational structure will be identical, over the projection period, to that of recent immigrants (i.e., five years or less) according to the 2021 Census, and
- allocation of international immigrants are adjusted towards occupations where labour supply (including recent immigrants) is allocated to occupations based on the relative demand (i.e., total number of job openings (E)) for each occupation.
The results are as follows:
- Labour force from international migration, by 512 5-digit NOC occupations, four regions and B.C., by year (not public) (G).
Projections of international migration are publicly available only at the provincial level. The results are as follows:
Supply from Interprovincial Migration
The net interprovincial migration population by 10-year age group is based on the BC Stats population projections (more information here). Then, participation rates by 10-year age group forecasts developed by Stokes, in a manner consistent with the BC Stats population projections, are applied to this net interprovincial migration to calculate the labour force due to interprovincial migration. Participation rates, by age and gender, of interprovincial migrants are assumed to be the same as for the general population. This qualitative assumption is considered reasonable but is not based on quantitative evidence.
Interprovincial migrants are then allocated to occupations using the Stokes model to allocate labour supply to occupations based on the relative demand (i.e., total number of job openings (E)) for each occupation. The results are as follows:
- Labour force from interprovincial migration, by 512 5-digit NOC occupations, four regions and B.C., by year (not public) (I).
Projections of interprovincial migration are publicly available only at the provincial level. The results are as follows:
Net Other Mobility
Net other mobility is then calculated as a residual used to match labour supply to labour demand. Stokes provides an estimation of net other mobility, which is calculated as the difference between yearly change in labour force and the sum of labour supply streams calculated previously: number of young people starting work (F); number of international immigrants (H); number of interprovincial migrants (J).
On top of net other mobility, an additional supply concept called “change in participation and unemployment” is used in the Labour Market Outlook. Change in participation and unemployment is defined as the difference between total job openings and the sum of three labour supply streams (number of young people starting work (F); number of international immigrants (H); number of interprovincial migrants (J)).
Note that at the occupation level, net other mobility (i.e. additional supply requirement) incorporates the net movement from/to other occupations. However, at the level of total occupation, inter-occupational mobility is "netted out." The results are as follows:
- Inter-occupational mobility, for 512 5-digit NOC occupations, B.C., by year (available here)12(K).
- Change in participation and unemployment, for 512 5-digit NOC occupations, B.C., by year (available here)12(L).
Finally, all streams of labour supply forecasts (F), (H), (J), (K) and (L) are summed to provide total additional supply:
Identification of Imbalances and Opportunities
To assess labour market imbalances and opportunities, a complex approach is taken, one that considers a wide range of indicators likely to increase the risk that an occupation may face future long-term supply constraints. Occupations with many job openings, growing fast, having low and declining unemployment rates and, with high wages, are more at risk of supply shortages. These factors are incorporated to develop a list of High Opportunity Occupations for the 10-year period.
The list is developed by examining all 512 NOC occupations based on occupational ranking. The ranking is designed to use a basket of labour market indicators for information on both the current and expected future labour market conditions for each occupation. The list is developed by asking four questions, as illustrated below.
| INDICATOR AND WEIGHT |
| How many job opportunities will be available? Forecast number of job openings (20%) Ratio of job openings to employment (10%) Forecast employment growth rate (20%) |
| How easy will it be to get a job in the future? Forecast unemployment rate (20%) |
| How easy is it to get a job now? Recent unemployment rate (10%) Ratio of employment insurance beneficiaries to employment (10%) |
| How much is the wage? Current wage rate (10%) |
The results are as follows:
- List of 5-digit NOC high opportunity occupations for the forecast period, B.C. and seven regions (available here) (N).
Footnotes
1 There are 516 occupations in total at the five-digit NOC code level under NOC 2021 Version 1.0. Due to unavailability of labour force characteristics for some occupations from the 2021 Census, five senior management occupations (NOCs 00011, 00012, 00013, 00014 and 00015) are combined into a non-standard occupation called “Senior managers — public and private sector” (NOC 00018).
2 Vancouver Island/Coast; Mainland/Southwest; Thompson-Okanagan; Kootenay; Cariboo; North Coast and Nechako; Northeast.
3 Vancouver Island/Coast; Mainland/Southwest; Southeast (sum of Thompson-Okanagan; Kootenay); North (sum of Cariboo; North Coast and Nechako; Northeast).
4 See Employment by Industry and Occupation for BC and Regions.
5 See Job Openings Expansion Replacement by Occupation for BC and Regions.
6 Both the BC Labour Market Outlook and the BC budget are aligned with BC Stats demographic projections. However, the budget uses only the first 5 years of projections whereas the Labour Market Outlook uses the first 10 years.
7 See Job Openings Expansion Replacement by Occupation for BC and Regions.
8 Ibid.
9 See Supply Composition for BC.
10 Ibid.
10 Ibid.
11 Ibid.
12 Ibid.
13 Ibid.