Effects of population aging on labour market flows in Canada: analytical issues and research priorities

Changes in the mix of goods consumed, and changes in the age mix of the labour force are the two main channels through which population aging is likely to affect labour market flows in Canada. In this paper it is argued that research should focus primarily on the second of these channels, because these effects are likely to be more direct and will occur earlier. Promising research directions in the area of labour force aging and worker flows include descriptive research on trends in labour market flows by age and education; research on the consequences of mobility (across jobs, employers, occupations, industries and regions) for older workers; understanding the effects of Canada’s multifaceted income support and retraining system on older job movers, especially older job losers; studying the cost-effectiveness of retraining for older workers and the optimal targeting of such retraining; defining and identifying age discrimination in employment and the effects of public policy thereon; understanding the implications of downsizings and plant closures for older workers; and improving our understanding of the way a firm’s age structure affects its behaviour and performance. In addition, research that helps assess the relative importance of some of the key processes generating labour market flows in the first place - for example, on-the-job search versus creative destruction processes - would improve our understanding of the effects of aging on labour flows.

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