Is unemployment a public health issue?

In case you missed it, there’s a new report on unemployment in Canada from the Survey on Employment and Skills looking at the reasons why some people fall out of the labour force (thanks to my colleagues at the Future Skills Centre and the Diversity Institute for co-authoring and publishing the report).

The report challenges the concept of the “discouraged worker.” The conventional wisdom, as I understand it, is that some people who are unemployed get discouraged when they can’t find a job and give up looking. These discouraged workers might be enticed back into the labour market when the economy picks up and employers start hiring again. There is also a suspicion that “discouraged workers” can be incentivized to re-start their job search once wages go up, or (more draconianly) once benefits are cut – either of which jolts them to recalculate the costs and benefits of looking for work versus staying at home.

Unemployed and not looking for work: characteristics

The data is based on a combination of survey Waves 3 to 6, conducted between 2021 and 2023. The combined sample includes 1,574 individuals who are unemployed and looking for work, and 734 individuals who are unemployed and not looking for work. 

Things start to look quite different when we consider the characteristics of those who are unemployed but not looking for work. The most striking findings are related to health.

Compared to those who are employed, or unemployed and looking for work, those who are unemployed but not looking for work are much more likely to report that both their physical and mental health are fair or poor, and much more likely to report that they have a physical or mental disability that limits their daily activity. Only 16 percent of those who are unemployed but not looking for work report no disability, compared to 52 percent of those who are unemployed and looking for work, and 66 percent of those who are employed.

Physical health (self-reported), by employment status

Disability (self-reported), by employment status

Reasons for not looking for work

The survey also asked those who are unemployed but not looking for work to say why they’re not looking for work at this time. This was an open-ended question, meaning that survey participants could answer using their own words. Individual answers are grouped together under common themes.

This question was asked in Waves 3 to 5 of the survey. A total of 582 people who were unemployed and not looking for work were asked this question. The results reported here combine the responses across the three survey waves, and are unweighted. As some gave more than one reason, 591 responses were counted.

The most common reason for not looking for work relates to health (but not specifically to COVID-19): 44 percent say they have a disability that prevents them from working; 10 percent mention anxiety, depression or a mental health issue; and nine percent say they have a health or medical issue.

Combining those together, 63 percent of this group of unemployed Canadians say they are not looking for work because of a disability, a physical health issue or a mental health issue (other than the pandemic). By contrast, only a small proportion of this group of unemployed Canadians can be described as “discouraged”, in that they have suspended their job search because of a perception that there are no jobs available – this applies to only 19 of 591 responses (3%). However, this figure rises to 10% if it’s combined with those who have stopped looking for work because of the economic shutdowns caused by the pandemic or who are experiencing a temporary layoff for another reason.

Also, about one in six (16%) of those who are unemployed but not looking for work decline to give a reason for why they’re not looking for work. It’s possible that those who don’t provide an answer may be discouraged workers who are simply unwilling to express (or admit to) their discouragement in the context of the survey. If so, the proportion that is discouraged may be higher than the 3% just mentioned. Such a conclusion is plausible, but speculative. Even if some information about the reasons for not looking for work is unclear, this doesn’t overshadow the information that’s provided relating to poor health and disability. A large majority of those who are unemployed but not looking for work explain their situation by referring to a disability, or to a physical or mental health condition.

When answering the question about why they’re not looking for work, many people simply say that they are sick or disabled, without further elaboration. But here are some more expressive examples of the reasons that people in this group provided themselves, in their own words. 

The bottom line: among those who are unemployed but not looking for work, the most common reasons for not looking for work relate to physical or mental health issues, or to having a disability – and by a wide margin.While these findings point to poor health and disability as factors causing people to stop searching for work, it’s possible that, for some people at least, the influence runs in the opposite direction: not being active in the labour force (and the lack of employment income that ensues) may lead to a deterioration of physical and mental health.

While some Canadians who are unemployed but not looking for work may be “discouraged” by the perception that there are no jobs available for them, many more report that they are physically or mentally unable to work on a regular basis.

This suggests that unemployment in Canada must be approached, at least in part, as a public health issue. We need better accommodations for people with disabilities, as well as wider acceptance of disability in the workplace. We need greater recognition of mental health issues, as well as better treatment. And we need preventive health measures to improve overall physical health in the population.

No amount of “labour market signals” – that is to say, no combination of “help wanted” signs and adjustments to wage and benefit levels – will succeed in coaxing people back to the labour force if in fact they are too sick or disabled to work.

Read all the detailed findings on this topic in our full report on the Unemployment in Canada: A report from the Survey on Employment and Skills.

This article has been reproduced with permission from writer Andrew Parkin and the Environics Institute for Survey and Research. It originally appeared on Mr. Parkin’s Substack.

The views, thoughts and opinions expressed here are the author’s own and do not necessarily reflect the viewpoint, official policy or position of the Future Skills Centre or any of its staff members or consortium partners.