Unemployment Rate

The
Economic Freedom
Network

October Questions and Answers

Joel Emes

Q: How is the unemployment rate calculated?

A: The unemployment rate is calculated by dividing the number of unemployed people by the number of people in the labour force. The labour force is composed of those members of the civilian, non-institutional, non-reserve population aged 15 years and older who are employed or unemployed. A person is considered employed if they did any work at all, or had a job but were not at work. People are considered unemployed if they were available for work and actively looked for work in the past four weeks, have not actively looked for work in the past four weeks but were on temporary lay-off; have not actively looked for work in the past four weeks but had a new job starting in less than four weeks.The information for this calculation is collected monthly by Statistics Canada in a survey of 52,000 Canadian households. The sample for the Labour Force Survey is designed to represent all persons in the population aged 15 and older excluding those living on Indian reserves, full time members of the armed forces, or those living in institutions (inmates of penal institutions and patients who have been in hospitals or nursing homes for more than six months). In August 1997 there were 1.389 million (seasonally adjusted) unemployed people in Canada and 15.405 million (seasonally adjusted) people in the labour force, for an unemployment rate of 9.01 percent.The number of employed people has been increasing since the end of 1992 while the number of unemployed people has decreased in two of the last four years (table 1). Economists often look at the number of jobs created in addition to the unemployment rate to evaluate the strength of a country's economy. While Canada has a high unemployment rate, there were 834,000 more jobs at the end of 1996 than there were at the end of 1992; a 6.5 percent growth in the number of employed people in four years. There were also 171,000 fewer unemployed people at the end of 1996 than at the end of 1992.

Q: How many people are employed in part time jobs? How has this changed in the last 20 years?

A: There were 2.6 million part time jobs and 11.1 million full time jobs in Canada in 1996 (see table 2). Part time jobs accounted for 18.9 percent of total employment in 1996 compared to 12.5 percent in 1976. Does this mean that a lot of full time jobs are becoming part time? No. Table 2 shows that full time jobs decreased and part time jobs increased in only four of the 20 years since 1976. The reason that part time jobs make up a larger share of employment now is that the growth in new part time jobs has been much higher than that for full time jobs. Full time employment grew by 30 percent over the last 20 years, whereas part time employment grew by 113 percent. This month's graph shows the year-to-year growth in total employment, full time employment, and part time employment. It shows that the year-to-year growth rate for part time employment was significantly higher than that for full time employment for many of the last 20 years.This increase in the proportion of part time jobs is often cited as a reason that Canada should have a shorter work week. However, a recent study by Statistics Canada shows that two-thirds of Canadian workers are satisfied with the number of hours they work. [Marie Drolet and René Morissette, Working More? Working Less? What Do Canadian Workers Prefer? Statistics Canada, Analytical Studies Branch, May 20, 1997.]

The study also found that the majority of dissatisfied workers would prefer to work more rather than less hours. The workers who are most likely to want more hours are generally young, have low levels of education, have little seniority, hold temporary jobs, and work short hours in low-skill jobs. The workers who are most likely to want a shorter work week are professionals and managers who have high hourly wages, high levels of education, long job tenure, permanent jobs, and already work long hours.

October Graph

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Last Modified: Wednesday, October 20, 1999.