Using the projections of population for the period 2001 to 2031, estimates of the total employment and employment growth that might result in 2011, 2021, and 2031 were developed for each of the 16 Census Divisions in the GGH. Results are summarized here for three aggregated areas (the Inner Ring, the Outer Ring, and the GGH). More details are provided in Appendix A.4.
Method
The method in this section is similar to that used to project household growth:
- The 2001 census provides data on employment by age group.
- This data is used to estimate employment rates by age group as of 2001 for each of the Census Divisions.
- Age-specific employment rates are applied to the population projections for the same age groups, to estimate employment by age group for 2001, 2011, 2021, and 2031.
- The age groups are combined to estimate total employment for 2001, 2011, 2021, and 2031.*
Projections
Employment rates vary by age group, as can be seen in Table 17, which shows employment rates by age groups for the Inner Ring, the Outer Ring, and the GGH. Not surprisingly, employment rates are lowest for people aged 65 years and older. The rates are below-average for young adults (15 to 19 and 20 to 24) and for the pre-retirement and early-retirement age groups (50 to 54, 55 to 59, and 60 to 64). Employment rates are highest for adults in the prime working ages of 25 to 49.
Table 17: Employment-to-Population Ratios by Age Group in the Greater Golden Horseshoe, 2001
Age Group | Inner Ring (%) | Outer Ring (%) | GGH (%) |
15-19 | 48.0 | 57.7 | 44.3 |
20-24 | 74.0 | 76.7 | 73.8 |
25-29 | 83.7 | 86.0 | 83.3 |
30-34 | 83.9 | 86.2 | 83.1 |
35-39 | 85.5 | 85.9 | 84.9 |
40-44 | 85.6 | 86.2 | 86.0 |
45-49 | 86.6 | 86.7 | 85.2 |
50-54 | 82.3 | 84.7 | 81.6 |
55-59 | 66.6 | 73.7 | 70.0 |
60-64 | 40.9 | 48.8 | 48.9 |
65+ | 8.6 | 11.4 | 10.6 |
All Ages | 68.2 | 69.3 | 69.8 |
Source: Statistics Canada, 2001 Census; calculations by Will Dunning Inc.
As Table 18 shows, during the 30-year period, the age distribution of the adult population will change. Of greatest importance for this exercise is the large increase in the share of the population aged 65 and over, which rises from 14.7 percent in 2001 to 24.3 percent in 2031. There are smaller increases in the shares in the early-retirement age brackets of 55 to 59 and 60 to 64. The shares fall for all of the age groups under 55 years. The percentage in the prime working ages (25 to 49) falls from 49.5 percent in 2001 to 39.6 percent in 2031.
Table 18: Distribution of the Adult Population by Age Group in the Greater Golden Horseshoe, 2001 to 2031
Age Group | 2001 (%) | 2011 (%) | 2021 (%) | 2031 (%) |
15-19 | 8.3 | 7.9 | 6.5 | 6.3 |
20-24 | 8.3 | 7.9 | 7.1 | 6.5 |
25-29 | 8.8 | 8.2 | 8.0 | 6.9 |
30-34 | 9.8 | 8.5 | 8.2 | 7.6 |
35-39 | 11.2 | 8.9 | 8.5 | 8.4 |
40-44 | 10.6 | 9.4 | 8.5 | 8.4 |
45-49 | 9.2 | 10.1 | 8.4 | 8.3 |
50-54 | 8.1 | 9.2 | 8.5 | 7.9 |
55-59 | 6.1 | 7.7 | 8.9 | 7.7 |
60-64 | 4.9 | 6.7 | 7.9 | 7.7 |
65 + | 14.7 | 15.6 | 19.4 | 24.3 |
All Ages | 100.0 | 100.0 | 100.0 | 100.0 |
Source: Statistics Canada inter-censal population estimates for 2001; calculations by Will Dunning Inc.
This evolving age distribution has significant implications for total employment in the GGH. Table 19 summarizes the projections of employment for the Inner Ring, Outer Ring, and GGH. These projections indicate that employment growth will decelerate sharply between 2001 and 2031, from an average of about 64,000 jobs per year between 2001 and 2011, to 31,500 jobs per year between 2011 and 2021, and just 8,800 jobs per year between 2021 and 2031. The percentage of adults employed in the GGH is projected to fall sharply, from 64.2 percent in 2001 to 57.6 percent in 2031.
Table 19: Projections of Employment and Employment Growth in the Greater Golden Horseshoe, 2001 to 2031
| Inner Ring | Outer Ring | GGH |
Total Employment | |||
2001 | 3,024,896 | 1,041,956 | 4,066,852 |
2011 | 3,468,059 | 1,238,572 | 4,706,631 |
2021 | 3,674,432 | 1,346,782 | 5,021,213 |
2031 | 3,719,781 | 1,389,847 | 5,109,628 |
Total Growth in Employment | |||
2001-2011 | 443,164 | 196,616 | 639,779 |
2011-2021 | 206,372 | 108,210 | 314,582 |
2021-2031 | 45,349 | 43,066 | 88,415 |
Annual Average Growth in Employment | |||
2001-2011 | 44,316 | 19,662 | 63,978 |
2011-2021 | 20,637 | 10,821 | 31,458 |
2021-2031 | 4,535 | 4,307 | 8,841 |
Annual Average % Change in Employment | |||
2001-2011 | 1.4% | 1.7% | 1.5% |
2011-2021 | 0.6% | 0.8% | 0.6% |
2021-2031 | 0.1% | 0.3% | 0.2% |
Employment rate | |||
2001 | 64.4% | 63.6% | 64.2% |
2011 | 63.5% | 61.8% | 63.1% |
2021 | 61.2% | 58.7% | 60.5% |
2031 | 58.5% | 55.2% | 57.6% |
Change 2001-2031 (Percentage points) | -6.0% | -8.4% | -6.7% |
Source: Will Dunning Inc.
Conclusions
These projections indicate that the aging of the population will slow employment growth in the Greater Golden Horseshoe. The projections are based entirely upon demographic change, not on an economic forecast, as they assume that for each age group, the percentage of people who are employed remains at the 2001 level.
In order for employment growth to be stronger than projected, it would be necessary for the age-specific employment rates to increase. However, in 2001, the GGH economy was at or close to a cyclical peak, so it is hard to imagine that the age-specific employment rates could increase for most age groups. If delayed retirement causes employment growth, very large increases in the employment rates would be required if the overall employment rate in 2031 is to be equal to the 2001 GGH rate of 64.2 percent. Table 20 illustrates one scenario that results in a 64.2 percent employment rate in 2031. In this scenario, the employment rate among people aged 65 and over must more than triple to 30 percent. There must also be increases in employment rates among the pre-retirement age groups. For example:
- In the 50-to-54 group, the employment rate must be 83 percent, similar to the rate for the 40 to 49 age groups.
- In the 55-to-59 age group, the rate must increase by more than one-tenth.
- In the 60-to-64 age group, the employment rate must increase by about one-third.
This scenario would require an extraordinary shift in behaviour and social convention, or else a profound shift in retirement incomes (reduced public and private pensions and the loss of personal savings or home equity) that forces a high percentage of the older population to delay planned retirements. If these doomsday scenarios do not come to pass, demographic change will likely result in a sharp slowdown in employment growth from 2001 to 2031.
Table 20: Simulation of Age-Specific Employment Rates (in the GGH) Required to Result in a 64.2% Employment Rate in 2031
Age Group | % of Adult Population in 2031 | GGH Employment Rate in 2001 (%) | Alternative GGH Employment Rate in 2031 (%) | Required Change in Employment Rate (%) |
15-19 | 6.32 | 44.5 | 44.5 | 0.0 |
20-24 | 6.49 | 70.8 | 70.8 | 0.0 |
25-29 | 6.90 | 80.8 | 80.8 | 0.0 |
30-34 | 7.61 | 81.2 | 81.2 | 0.0 |
35-39 | 8.41 | 82.4 | 82.4 | 0.0 |
40-44 | 8.39 | 83.1 | 83.1 | 0.0 |
45-49 | 8.27 | 83.1 | 83.1 | 0.0 |
50-54 | 7.95 | 78.9 | 83.0 | 4.1 |
55-59 | 7.69 | 66.5 | 75.0 | 8.5 |
60-64 | 7.66 | 43.6 | 60.0 | 16.4 |
65 + | 24.31 | 9.1 | 30.0 | 20.9 |
All Ages |
| 64.2 | 64.2 |
|
Source: Will Dunning Inc.
It might be argued that the reduction in the employment rate will result in increased migration to the GGH by working-age adults. However, since the entire country will be experiencing the same demographic changes, there is no reason to believe that this change alone will cause increased movement to the GGH from other areas of Canada. Migration to the GGH will be determined by economic costs and opportunities. Only a considerable change in economic conditions would cause increased migration by adults from the rest of the country. However, a change in immigration policy might result in increased immigration by working-age adults.