From the late 1970s to the early 2010s, at least one in five permanently laid-off workers saw their real earnings decline by at least 25% even five years after job loss (Chart 1).Īlthough Employment Insurance benefits offset part of the earnings losses, these benefits are usually exhausted after one year. The reason is simple: job loss reduces the earnings of many displaced workers not only in the short term, but also in the longer term (Jacobson, Lalonde and Sullivan, 1993 Morissette, Zhang and Frenette, 2007 Morissette, Qiu and Chan, 2013). job losses, is crucial to understanding how it might affect Canadian workers in the longer term. The degree to which the COVID-19 pandemic will result in permanent layoffs, i.e. But these temporarily laid-off workers were not insulated from subsequent job loss: about 15% of them lost their job year the following year. The remainder were involved in temporary layoffs. This is still the case so far: layoff rates since February 2020 have been higher among the aforementioned groups than among other groups of workers (Table 1).ĭuring the last three recessions, roughly 45% of all laid-off workers were permanently laid-off (Table 1). In contrast, average monthly layoff rates during the first two months following previous labour market downturns varied between 2.5% and 3.5%.ĭuring the last three recessions (1981-1982, 09), young workers, less educated workers, and recently hired workers were more likely to be laid-off-temporarily or permanently-than other employees (Chan, Morissette and Frenette, 2011). On average, 12.4% of Canadian paid workers aged 15 to 64 have been laid-off on a monthly basis since February 2020 (Table 1). The goal of this article is to highlight these facts. While these facts do not necessarily allow accurate predictions of the impact of the pandemic on job displacement, they provide a long-term perspective from which forthcoming labour market developments can be assessed. Yet a number of stylized facts emerge from the past. will be permanently laid-off, as a result of the COVID-19 pandemic Note and what will happen to them financially after job loss. It is too early to know how many Canadian workers will lose their job, i.e.
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