Changes in real wages also play a role in determining the labour-force
participation rate. A rise in the demand for labour, and an accompanying
rise in the real wage, will lead to an increase in the proportion of the
population willing to work. For example, for the decade after 2003 in
Alberta, a booming economy driven by high energy prices increased real
wages up to the point that there was a notable increase in high school
dropout rates as some students chose instead to pursue employment in
the labour market. With the massive decline in world oil prices in late
2014, however, these pressures were reversed.
The significant increase in female labour-force participation that occurred
between the 1960s and the 1990s had a significant effect on the growth of
Canada’s aggregate labour supply.
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