What is this metric and why is it important?
Labour force statistics not only tell us about the health of the economy generally, but also provide insight into who is participating, who is excluded, and who is benefitting. Here we look at the portion of those aged 20 to 64 that is in the labour force (those who are working or actively looking for work).
How is Canada doing?
- Canada’s labour force participation rate was 81.1% in 2018, just above the OECD average of 79.2%
- In Canada, the Yukon, Northwest Territories, and Alberta had the highest participation rates, at 85.9%, 84.3%, and 83.6% respectively.
- Overall in Canada men had a higher labour force participation rate than women by 7.5 percentage points. The OECD average is a difference of 12.4 percentage points.
According to the OECD, the participation rate is defined as the portion of the working-age population that is in the labour force. The labour force consists of all persons who fulfil the requirements for inclusion among the employed (civilian employment plus the armed forces) or the unemployed.
While the innovation economy is not the economy at large, the distinction is often murky and ill-defined. Given the broad definition we use for the innovation economy, the participation rate in the larger economy gives a reasonable indication of the employment rate in the innovation economy. Differences across jurisdictions speak to the extent to which people have access to employment opportunities and the accompanying income and benefits.
Unlike the employment rate, the unemployment and participation rates rely on definitions of “the labour force”—i.e., the employed and those looking for employment. A limitation of this approach is that it can be difficult to define what it means to be someone who wants to work.