|Name||British Columbia Labour Market Outlook|
|Author||Ministry of Advanced Education, Skills & Training; Labour Market Insights, Evaluation and Outreach Branch|
|Contactfirstname.lastname@example.org or Chris Holling, Director of Labour Market Forecasting, email@example.com|
|Timing||10-year forecast, updated annually|
Datasets available on British Columbia's Data Catalogue
|Additional documentation||Key definitions|
The British Columbia Labour Market Outlook estimates labour demand for the 500 4-digit National Occupational Classification (NOC) unit groups for 59 industries plus aggregates and special sectors for seven economic regions1 and the province. Labour supply indicators are provided for the 500 4-digit NOC occupations for four aggregated regions2 and the province.
The British Columbia Labour Market Outlook draws upon the Stokes Model for demand and supply forecast, 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 500 occupations and each year of the 10-year forecasting period, expansion and replacement demand are forecast and summed as the number of job openings.
In-house Employment Projection
First, employment by industry for British Columbia (BC) is forecast using an in-house model. The model uses several different time series forecasting techniques and adjustments to reflect stakeholder consultations or specific industry research. Forecasts from other ministries are also incorporated, such as teachers’ employment based on student enrollment forecasts, energy sector output and employment from energy production forecasts. Assumptions about major infrastructure projects are aligned with the assumptions used by the BuildForce Canada BC Advisory Committee.
Significant attention is devoted to analyzing the last historic year of employment data to determine whether it accurately represents the actual situation in the industry or whether and to what extent the estimates include survey error. This analysis is then used to establish the proper jump-off point for the first forecast year. This issue of the transition from the last year of history to the first year of forecast and the possible impact of survey error is one of the reasons that the base year for the forecast is the first forecast year.
Stokes Employment Projection
The Stokes econometric model also provides an employment by industry forecast that is considered by BC to calibrate their own projections. To align the Labour Market Outlook with the province’s other forecasts, BC’s historical economic data, income data and population forecasts from Statistics Canada and BC Stats, as well as BC’s budget forecast from the BC Ministry of Finance as well as major projects data from the BC Ministry of Advanced Education, Skills and Training are provided to Stokes Economics to feed into the econometric model. Also, historical Labour Force Survey (LFS) employment by industry and region data is obtained by BC through Statistics Canada’s Real Time Remote Access (RTRA) service and is provided to Stokes.
Next, historic productivity is estimated by dividing industry-specific GDP by employment. Productivity by industry is then forecast. Applying the forecast productivity rates to the forecast GDP, a first-round estimate of employment for the 15 industries is obtained. The employment forecast is then further split into 59 detailed industries based on trend productivity growth assumptions.
The results are as follows:
- Number of employed for 59 custom industries (2, 3 or 4-digits by 2012 NAICS), seven regions and BC, by year (available here, see Employment by Industry for BC and Regions) (A).
Employment and Job Openings Due to Expansion by Occupations
Finally, the share of employment of each of the 500 4-digit NOCs within each of the 59 industries is estimated using a custom request to Statistics Canada’s 2016 Census. For most occupations, the share of occupation by industry is assumed to be constant and equal to the 2016 share over the projection period. For a limited number of occupations, the projections are adjusted manually based on existing administrative data and studies. The results are as follows:
- Number of employed for 500 4-digit occupations from the National Occupational Classification (NOC) for seven regions and BC, by year (available here)3 (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’s methodology for more information ). The results are as follows:
- Expansion demand for 500 4-digit occupations from the National Occupational Classification (NOC) for seven regions and BC, by year (available here)4 (C).
Labour Demand, Normal Level of Unemployment and Job Vacancies
In the Stokes model, labour demand is defined as the sum of employment and normal unemployment. The latter is estimated based on historical unemployment rates from the LFS.
However, labour demand is commonly defined as the sum of met demand (i.e., number of employed) and unmet demand (i.e., number of job vacancies).
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).5
Retirement rates by occupation are estimated by fitting a retirement distribution around the median age of retirement by occupation (retrieved from the Labour Force Survey via Statistics Canada Real Time Remote Access [RTRA]). Retirement rates are then forecast over the period based on subjective assessments of retirement trends. In recent years, adjustments have slightly reduced retirement rates in relation to more people deciding to delay retirement.
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:
- Number of job openings in existing positions (i.e., replacement job openings), for 500 4-digit NOC occupations, seven regions and BC (available here)6 (D).
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.
- Total job openings for 500 4-digit NOC occupations, 59 custom NAICS industries, seven regions and BC, by year (available here7 (E).
Projection of Labour Supply
The projection of job seekers calculation considers four streams of labour supply:
- Net international migration
- Net interprovincial migration
- New entrants
- Net other mobility
Supply from Net International Migration
Net international migration by 10-year age groups is calculated based on demographic forecasts from BC Stats (more information here) for the four regions plus BC overall.
Next, participation rates by single years 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 2016 Census. Analysis of these rates by age and gender indicates that they roughly match those of the overall BC population. International immigrants are then allocated to occupations. Two allocation approaches - the Stokes model and an in-house distribution model - are then compared.
The Stokes model provides an allocation of international immigrants to occupations where labour supply (including recent immigrants) is allocated to occupation 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 500 4-digit NOC occupations, four regions and BC, by year (not public) (F).
International immigrants are also allocated to occupations using the in-house distribution model. The model assumes that 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 2016 Census. Note the allocation model is only available at the provincial level (not by region) and for the whole 10-year forecast period (not by year). The results are as follows:
- Number of international migrants, BC, 10-year total (available here)8 (G).
Ultimately, the allocation is done using the in-house model (G).
Supply from Interprovincial Migration
The net interprovincial migration population by 10-year age group is calculated based on BC Stats demographic forecasts (more information here). Then, participation rates by 10-year age group forecasts developed by Stokes Economics, in a manner consistent with the BC Stats population forecasts, 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 occupation 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 500 4-digit NOC occupations, four regions and BC, by year (not public) (H).
Projections of interprovincial migration are publicly available only at the provincial level and for the whole 10-year forecast period. The results are as follows:
- Number of interprovincial migrants, BC, 10-year total (available here)9 (I).
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 demographic forecasts (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 BC’s Post-Secondary Supply Model or PSSM (more information here and here) provides the forecast of new entrants with a BC post-secondary credential by occupation and year. Subtracting the PSSM results from the total number of new entrants (J) estimates the "other new entrants" (i.e., young people starting work with other education) by occupation. The results are as follows:
Net Additional Supply Requirement
As a final step, the net additional supply requirement is calculated as a residual used to match labour supply to labour demand. Stokes provides an estimation of the net additional supply requirement, which is calculated as the difference between yearly change in labour force and the sum of labour supply stream calculated previously: number of international migrants (G); Number of interprovincial migrants (I); Number of young people with post-secondary education (K); number of young people starting work with other education (L).
As with new entrants, the PSSM forecast is used to split the net additional supply requirement into two categories: 1) people 30 years old and over with new BC post-secondary credentials and 2) "other additional supply." The PSSM component is described as "net inter-occupational mobility facilitated by the BC post-secondary system."
Note that at the occupation level, net additional supply requirements incorporate the net movement from/to other occupations. However, at the level of total occupation, inter-occupational mobility is "netted out."
- Net additional supply requirement for 500 4-digit NOC occupations, BC, 10-year total (available here)12 (M).
Finally, all streams of labour supply forecasts (G), (I), (K), (L) and (M) are summed to provide total additional supply:
- Total additional supply for 500 4-digit NOC occupations, BC, 10-year total (available here)13 (N).
Identification of Imbalances
The identification of imbalances is done using a two-stage approach, an initial assessment is done based on the net additional supply requirement (M), then a range of indicators are observed to identify more precisely imbalances by occupations.
The aggregate (total occupations) net additional supply requirement is the headline indication of the degree of projected imbalance in the BC labour market. It is expressed as a percentage of total job openings (see the latest technical report available here.). It is positioned as a supply gap that can and will be filled by either increased labour force participation or more rapid adoption of automation than is assumed in the forecast.
Identifying shortages at an occupation level is a complex issue. Occupational labour demand (E) and supply (N) are publicly available and many are tempted to use this simple difference to identify occupational shortages. However, this difference is not highlighted in the report and is not often used as a key indicator for internal analysis. Since the net additional supply requirement is used to balance demand and supply, any changes in demand-supply differences simply reflect the adjustment of the model as it allocates supply to demand with a time lag.
Instead, a more 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 500 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%)
In addition to the core forecast, analyses were conducted to increase the relevance of the information.
- O*Net skills and competencies data have been mapped to the 500 NOC occupations to produce a forecast of job openings associated with skills and competences (available in the technical report here).
- Similarly, O*Net data on occupational interests have been connected to the forecast in order to provide forecasts of job openings for occupational interest categories.
- Additional forecasts are conducted for custom occupational groups; for example, apprenticeship trades occupations, STEM occupations.
- Job openings forecasts are available upon request for Classification of Instructional Programs (CIP) at the 2-digit and 4-digit levels. These are developed using educational attainment data from the 2016 Census.
The British Columbia Labour Market Outlook results are distributed and used in many ways.
Results are available for individual Canadians to make education, training, career and immigration decisions via the Canadian Occupational Projection System (COPS) and other sources:
Employment Policies and Programs
The data is used to inform government and non-government employment and skills training programs.
Immigration Policies and Programs
The labour forecast data is used to inform the provincial immigrant nominee program.
Education Policies and Programs
- Data about where the labour market is headed helps to inform K-12 skills and competencies.
- The forecast also informs post-secondary programs to ensure that they are aligned with labour market needs.
Economic Development Policies and Programs
A wide variety of industry and professional associations, unions, Indigenous communities, provincial government ministries and local governments use the report to support their research, planning and communications needs.
1 Vancouver Island/Coast; Mainland/Southwest; Thompson-Okanagan; Kootenay; Cariboo; North Coast and Nechako; Northeast.
2 Vancouver Island/Coast; Mainland/Southwest; Southeast (sum of Thompson-Okanagan; Kootenay); North (sum of Cariboo; North Coast and Nechako; Northeast).
3 See Employment by Industry and Occupation for BC and Regions.
4 See Job Openings Expansion Replacement by Occupation for BC and Regions.
5 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.
6 See Job Openings Expansion Replacement by Occupation for BC and Regions.
8 See Supply Composition for BC.