Substantial increases in the labour force participation of women are a striking feature of the labour market developments in most Western nations. While the growth in participation began at different times and has advanced at different rates, the quantitative changes in the North American labour market over the past three decades have been remarkable.
According to the Organisation for Economic Co-operation and Development (OECD), in 1990, women in Canada and the United States had the 5th and 6th highest labour force participation rates (LFPRs) among 22 Western economically advanced nations. By 2014, however, both Canada and the United States saw their international rankings slip to 11th and 20th positions, respectively. This decline in rankings was due to the fact that the average LFPR of women in the other OECD countries grew faster than in Canada and the United States.
Given the linked nature of the Canadian and American economies, comparisons between labour markets in Canada and the United States have garnered considerable attention. While the difference in the participation rate remained relatively small between Canadian and U.S. men in recent years, the participation rate of females diverged between the two countries. Why is it that the labour force participation rate of Canadian women is so different from the rate of their American counterparts?
This article attempts to sort through various explanations to create a comprehensive picture of the Canada–U.S. gap in the labour force participation rates of prime-aged women (aged 25 to 54). Restricting the comparison to the core working age population simplifies the analysis, since it minimizes the potential impact of the changes in years of schooling and age of retirement that took place during the period studied.
- In 1997, the labour force participation rates (LFPRs) of women aged 25 to 54 in Canada and in the United States were close, at 76% and 77% respectively. In 2015, the LFPR of women aged 25 to 54 was 81% in Canada, compared with 74% in the United States, a gap of 7 percentage points.
- In the United States, the LFPR declined by almost 3 percentage points between 1997 and 2015—mainly as a result of a decline in the LFPR of younger women (aged 25 to 44).
- In Canada, the LFPR increased by 5 percentage points over the same period. The increase was mainly the result of an increase in the LFPR of women aged 45 to 54.
- In Canada, rising levels of educational attainment explained the entire increase in the LFPR of women aged 25 to 44 and about one-third of the increase in the LFPR of women aged 45 to 54. In the United States, without the positive contribution of rising educational attainment, the female LFPR would have declined even more over the period.
- In both countries, there has been a reduction in the male-female gap in participation rates. In Canada, the reduction mostly came from increases in the LFPR of women. In the United States, the reduction largely came from a reduction in the LFPR of men.
Chosen excerpts by Job Market Monitor. Read the whole story at The Canada–U.S. gap in women’s labour market participation