Overview

Abstract (English)

This paper documents striking new job stability patterns in Canada and explores their causes. Using a rich source of tenure data, that what was previously seen as cyclical change is actually a secular increase in job stability. Since the early 1990s, job stability increased at the aggregate level, and especially for women and workers with less than one year on the job. For the latter group, the change is particularly striking. Comparing the 1987-1989 and 1998-2000 periods, both strong expansionary periods, job stability for workers with less than one year of initial tenure increased from 44.4% to 54.5%. I use standard retention rate techniques, but show that existing approaches for estimating standard errors are biased, and I provide a consistent alternative. That ageing of the workforce and increased labour force attachment of women play a role in the aggregate job stability patterns that emerge. However, they cannot account for the large increase in stability of newer jobs. This increase in stability is economy-wide present across regions, industries, and gender, to name just a few. Within a match quality framework, I show that the much stricter eligibility requirements introduced in the early 1990s for the Employment Insurance (EI) program led to the dramatic increase in stability of newer jobs. There is now a greater probability that a future job separation will occur with the worker not having met the EI eligibility requirements. As a result, the job seeker will now require greater match quality assurances before agreeing to an employment relationship; this will lead to fewer low quality (and less stable) matches being formed.

Abstract (French)

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