1887

Back to Work: Canada

Improving the Re-employment Prospects of Displaced Workers

image of Back to Work: Canada

Job displacement (involuntary job loss due to firm closure or downsizing) affects many workers over their lifetime. Displaced workers may face long periods of unemployment and, even when they find new jobs, tend to be paid less than in their prior jobs. Helping them get back into good jobs quickly should be a key goal of labour market policy. This report looks at how this challenge is being tackled in Canada. While the Canadian government uses several measures to prevent unnecessary layoffs, the focus is placed on assisting workers after they have lost their job via the Employment Insurance system and the core labour market programmes operated by the Provinces. Re-employment assistance tailored to meet the specific needs of displaced workers also plays a useful role, but needs to be reinforced so as to start the adjustment process earlier for workers receiving advance notice or a large severance payment and to reach  workers affected by small-scale displacements. Targeted programmes for older displaced workers with long-tenure who are hardest hit have yet to reach a large share of this group.

English French

.

Foreword

OECD labour markets are characterised by their dynamism. Each year, more than 20% of jobs, on average, are created and/or destroyed, and around one-third of all workers are hired and/or separate from their employer. These large job and worker flows are driven by a continuous process of labour reallocation, both across industries and between declining and growing firms within the same industry. This reallocation is an important source of productivity gains, since more productive firms expand at the expense of less productive firms and earnings rise on average for workers changing jobs, particularly workers who voluntarily quit one job in order to move to another. However, high job turnover is also a source of insecurity for workers, especially those who are displaced from their jobs because their employer downsizes its workforce or goes out of business altogether. A common challenge facing OECD governments is thus to nurture labour market dynamism while keeping the adjustment costs that are borne by displaced workers as low as possible.

English French

This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error