Friday, January 3, 2014

Unemployment Rates Across Canada

Unemployment rate is an economic indicator frequently followed by news commentators, economists, governments, and oppositions throughout the world. It is the share of the labor force without any job and actively seeking one.  In Canada, the federal government is responsible for the employment insurance program and provincial governments are responsible for the other employment assistance programs and services that include: career advice, job search resources, support for self-employment, integration programs for immigrants, minorities, and disabled people … The level of the unemployment rate in a given province may depend on common factors such as: the state of the world economy or the employment insurance rules. It may also simply depend on the geographic location of the province or  rather on province-specific factors such as:  the production capacity of the province, the types of jobs that are available, the effectiveness of the province's employment policy …

In this post, I describe the evolution of unemployment rate in the ten provinces of Canada between January 1976 and November 2013 and compare it to the national average. Unemployment rate turns out to be particularly higher on the East coast of Canada than in the rest of the country.


The three figures below plot the evolution of the unemployment rates in the ten provinces grouped by region: the Atlantic provinces (Newfoundland and Labrador, Prince Edward Island, Nova Scotia, and New Brunswick) , the Central provinces (Quebec, Ontario), the Prairie provinces (Manitoba, Saskatchewan, Alberta), and the West Coast (British Columbia). 

Figure 1: Unemployment Rates in Canada and its Atlantic Provinces, Seasonally Adjusted, 1976:1-2013:11, Data Sources: Statistics Canada.

Figure 1: Unemployment Rates in Canada and its Atlantic Provinces, Seasonally Adjusted, 1976:1-2013:11, Data Sources: Statistics Canada.

Figure 2: Unemployment Rates in Canada and its Central Provinces, Seasonally Adjusted, 1976:1-2013:11, Data Sources: Statistics Canada.

Figure 2: Unemployment Rates in Canada and its Central Provinces, Seasonally Adjusted, 1976:1-2013:11, Data Sources: Statistics Canada.

Figure 3: Unemployment Rates in Canada and its Prairie and Western Provinces, Seasonally Adjusted, 1976:1-2013:11, Data Sources: Statistics Canada.

Figure 3: Unemployment Rates in Canada and its Prairie and Western Provinces, Seasonally Adjusted, 1976:1-2013:11, Data Sources: Statistics Canada.

In my earlier post titled Unemployment Rates in Canada and the US, I described how unemployment rose in Canada in relation to some world major economic crises: the 1970s oil crises, the early 1980s crisis, the 1990 oil shock, and the global recession of 2008-2012. The figures above show that the rises in the national average rate stemmed from increased unemployment not just in some but in all the provinces across the country. Particularly, figure 2 shows the closeness of the dynamics of the national unemployment rate to those of Quebec, Ontario.
Besides, one also notice from the figures that the distribution of unemployment rate across the country reflects a neighborhood effect, i.e., unemployment rate is higher than the national average in the Atlantic Provinces and the neighboring Quebec, and lower in Ontario and the Prairie provinces.  Table 1 below reports the average unemployment rates across the country.  
The province of Newfoundland and Labrador exhibits the highest and more volatile unemployment rate in Canada and Saskatchewan exhibits the lowest and less volatile rate. The highest unemployment rate in Canada occurred in Newfoundland and Labrador in September 1984 and the lowest rate occurred in Alberta in October 2006. Statistical tests confirm that unemployment rate in:
  • Newfoundland and Labrador, Prince Edward Island, Nova Scotia, New Brunswick, Quebec, and British Columbia are higher than the national average,
  • Ontario, Manitoba, Saskatchewan, and Alberta are lower than the national average.

See Also
Garcilazo, Jose E and Spiezia, Vincenzo (2007) Regional Unemployment Clusters: Neighborhood and State Effects in Europe and North America, The Review of Regional Studies, vol 37, no 3, pp 282-302.