Introduction
There is a constant evolution in the global landscape of labour markets. This evolution is influenced by myriad factors ranging from economic conditions to government policies, thus affecting both workforce and economic statuses in different ways. For instance, the labour shortage in Canada is a current crisis facing the country and has attracted significant attention from government agencies prompting policymakers to devise innovative strategies that aim at arresting the situation. One such strategy is the recent initiative that temporarily lifted the part-time work hour limit for international students pursuing post-secondary degrees in 2023 by the government. The policy involves alterations and realignment of the workforce to mitigate labour shortages by fully engaging international students to work full-time, deviating from the standard restriction of 20 weekly hours. However, this policy’s short-term nature raises the question of its efficacy and direct impacts on the labour shortage in specific sectors vulnerable to scarcity prior to 2023.
Aim of the Proposal
This research proposal aims at conducting a comprehensive analysis of the potential effects of the 2023 policy shift on labour shortages in the economy of Canada. By utilizing the invaluable dataset provided by the Canadian Labor Force Survey (LFS), this study intends to employ the Difference-in-Differences (DID) approach to elucidate the causal relationship between the policy change and the alleviation of labour shortages in targeted sectors. The DID method, known for its effectiveness in estimating causal impacts using observational data, allows for examining policy-induced changes by comparing treatment and control groups over time. It will provide reliable findings that can be used to curb possible negative impacts of government policy.
Hypothesis
The central hypothesis of this study posits that the temporary allowance of full-time work for international students in 2023 had a discernible positive impact on reducing labour shortages within specific sectors that were most vulnerable to scarcity prior to the policy implementation. These sectors, characterized by their susceptibility to workforce gaps, will be identified based on their NOC 40 job classifications. By harnessing the wealth of information available within the LFS dataset, encompassing data on immigrants, current students, labour force status, and more, this research endeavours to provide nuanced insights into the relationship between policy change and labour market dynamics.
The research study will follow a structured methodology encompassing data preparation, group identification, and applying a rigorous DID analysis to achieve this objective. The latter involves creating a panel structure to compare treatment and control groups in both 2023 and 2024. The study will gauge the policy’s differential impact on labour shortages within the targeted sectors by estimating the coefficients associated with the pre-and-post-policy years and their interaction with the treatment group.
Findings
The findings of this research bear significant implications for both policy formulation and labour market dynamics in Canada. Understanding how the temporary policy shift influenced labour shortages will provide valuable insights for future policy design and labour market management. Furthermore, this study contributes to the broader field of labour economics by showcasing the potential of DID analysis in evaluating the real-world impact of time-bound policy interventions.
Discussion
In the subsequent sections, this research proposal will detail the data preparation process, the definition of the treatment and control groups, the DID analysis methodology, and the robustness checks to ensure the credibility of the findings. By employing a rigorous analytical framework and drawing on the rich dataset provided by the Canadian Labor Force Survey, this study aims to provide a robust assessment of the impact of the temporary full-time work policy on alleviating labour shortages within the targeted sectors.
References
Akbar, M. (2023). Best Practices in Supporting International Students Enrolled in Toronto-area Colleges.
Saunders, D., & Hazel, M. (2018). Students in the labour market: beyond the recession. Statistics Canada.
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