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New Report: After the shocks: Preventing long-term labour market scarring for youth

October 3, 2023

Canada’s population is aging, with a growing number of workers reaching retirement age. Our prosperity depends on supporting Canadian youth to reach their full potential in the workforce and ensuring they aren’t left behind in the long term.

Economic shocks, such as those created by COVID-19, leave well-documented lasting impacts on young people.These impacts, known as labour market scarring, are shaped and amplified by discrimination, personal circumstances, and context beyond the job market.The impacts of long-term labour market scarring include:

  • Losses in earnings potential and reduced quality of employment, especially for new graduates.
  • Stigma towards resume gaps and reduced equity and inclusion as a result.
  • Costs to well-being and social capital, including mental health impacts and diminished networks.
  • Worsening of pre-existing inequities faced by certain populations, including youth from low-income households, racialized youth, Indigenous youth, and LGBTQ2S+ youth.
  • Reduced economic productivity due to a lack of labour market participation.

Typical policy responses address the immediate, short-term impacts of economic shocks. A more concerted and coherent policy response is warranted to prevent long-term scarring and minimize its impact on youth and broader productivity and growth.

Century Initiative’s latest Key Insight report, developed with support from the Future Skills Centre, examines the unique social and economic effects of shocks on young people. The report investigates how deep the issue goes, identifies existing policy gaps, and recommends 13 specific, actionable policy responses to mitigate the harms of long-term labour market scarring on youth.