cover image: Accounting for the Decline of Canada’s Real GDP Per Capita

Accounting for the Decline of Canada’s Real GDP Per Capita

17 Jul 2024

The paper identifies six factors currently influencing real GDP per capita: (1) labour productivity; (2) average hours worked per job; (3) the employment rate of the working-age population; (4) the ratio of the working-age population to the permanent resident population (where working-age includes NPRs in that age class); (5) the share of permanent residents in the total population; and (6) the re. [...] study of the socio-economic characteris- The information in the Statistics Canada tics of the NPR population using data for study implies the overall impact of NPRs 2020 drawn from the 2021 Census of Pop- on GDP per capita is quite different from ulation (Tuey and Bastien 2023). [...] This ratio can be expressed as deflated value of inputs - because there is a product of other ratios that are thought no measure of the market value of outputs to be important in explaining changes in - divided by the number of hours worked in GDP per capita, with the proviso that the the sector. [...] working-age population.9 This driver is The next factor influencing GDP per similar to the previous factor, but rather capita is the ratio of the permanent resi- than focusing on the amount of work done dent population (citizens and immigrants) in the average job it focuses on the number to the total population. [...] Since the denominator of the ployment rate and the total-economy-to- labour productivity ratio does not distin- business-sector GDP ratio are continuing guish how skilled and experienced the em- to make positive contributions, but the ployed people are, on average, measured falling PR share of the population (equiv- productivity increases simply by having a alently the rising share of the NPR pop-.

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Pages
18
Published in
Canada