The State of Labour Market Churn in Canada

The literature highlights that labour market churn, including job-to-job transitions, is a key element of wage growth. Using microdata from the Labour Force Survey, we compute measures of labour market churn and compare these with pre-crisis averages to assess implications for wage growth. Overall, while it has improved in Canada, labour market churn broadly remains below pre-crisis averages. This relatively subdued level of churn is consistent with modest slack remaining in the Canadian labour market and thus helps explain the modest wage growth over the past few years.