A falling unemployment rate means a healthy growing labour market, right?

Not necessarily, according to a new study by the Fraser Institute.

The authors say a declining jobless rate is in part because Canada’s population is getting older and more Canadians are retiring from the workforce.

The study finds that from 2008 to 2017, as Canada’s population aged, the labour force participation rate declined as more and more Canadians retired and left the workforce, dropping from a peak in 2008 of nearly 68 percent to under 66 percent in 2017. And that rate is forecast to keep dropping to 61 percent by 2060.

Co-author Jason Clemens says as more baby boomers retire in the coming years, media, policymakers and Canadians more generally should look at the employment rate, not the unemployment rate, for a more accurate picture of the health of Canada’s labour market.