Part-time work: a matter of demand or supply?

Part-time work: a matter of demand or supply?

Ted Mallett, Vice-president and Chief Economist

May 2017

 

Context is important when dealing with economic statistics. Although the number of jobs is an important indicator of economic health and progress, in aggregate, it is a pretty blunt measure. Paid tasks vary widely and work is structured around the needs and preferences of both employers and employees—ideally finding a balance between buyers and sellers of labour services.

Part-time employment is one of those dimensions with advantages for both groups. In Canada’s case, about 19 percent of all jobs involve fewer than 30 hours per week. The proportion is well below the rates found in the UK, Australia and the Netherlands, at 24, 25 and 39 per cent respectively (see Figure 1). Official part-time employment rates in the US are about the same as Canada’s, but figures are not directly comparable because the US uses a higher 35 hours-per-week threshold.

Clearly there appear to be structural and policy-based reasons for the variation in rates among countries. Labour standards, work rules, social assistance policies and minimum wage levels all appear to have some influence on the level and the path of part-time work incidence.

The fact that Canada’s part-time job rate has remained stable for the past 25 years is also telling. The rate is affected slightly by the business cycle, but because it has not moved more than one percentage point in either direction during that timeframe, economic conditions do not appear to be major drivers.

Details of why employees say they are in part-time work, however, show interesting shifts. To simplify and illustrate, the list of rationales covered by Statistics Canada’s Labour Force Survey are regrouped into four main categories: personal preferences, school constraints, personal constraints (illness, care for children or for other personal needs) and opportunity constraints (poor economic conditions, belief that no full-time positions are available). To no great surprise, demographic shifts appear to play the main role in what shifts are observable.

Personal preference has become the most common reason for becoming or staying part-time, now representing 5.8 per cent of total employment—mainly driven by employees in older age groups (see Figure 2).

Among young workers, large gains in school enrollments meant that part-time work has become more common by default. At 3.2 per cent of total workers, personal reasons such as illness and caring for others are the least common rational for seeking part-time work, and that proportion has seen no change in the past two decades.

As of 2016, fully three-quarters part-time work is demand driven, representing the needs and desires of employees—up from just over two-thirds in 1997. Conversely, only one-of-four part time jobs was supply driven in 2016, reflecting the structure or possible choices made by employers—down from about a third in 1997.

 

Ted Mallett, Vice-president and Chief Economist

416-222-8022 : ted.mallett@cfib.ca : @cfibeconomics

 

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