Little evidence AI is to blame for decline in youth hiring, new StatCan study finds

A fresh investigation from Statistics Canada indicates that while securing employment may prove challenging for youth, artificial intelligence (AI) is not the primary culprit. The study, published last week, revealed "no substantial evidence" that the growth of AI has resulted in significant declines in employment or surges in job separation rates in Canada since November 2022, when ChatGPT was made public.

This was particularly true for young workers and those in occupations potentially more susceptible to AI substitution, such as data-entry clerks or jobs requiring extensive computer coding.

Tahsin Mehdi, a senior research economist at the agency and co-author of the study, acknowledged that AI is reshaping workflows and redefining jobs, but emphasized that it may not be eliminating entire jobs at the moment. According to the study, hiring and job separation rates, which include layoffs, remained "generally within historical ranges" or represented a continuation of pre-existing trends during the period from six months before November 2022 to six months ahead of August 2026.

The researchers examined data from labour force surveys for workers aged 15 to 64 in Canada between January 2006 and August 2026, classifying jobs based on their potential exposure to and complementarity with AI. Mehdi explained that these metrics were chosen because they can provide early signals of shifts in the labour market, triggered by factors such as trade dynamics, economic conditions, technological disruptions, or AI.

The study found that hiring rates for young workers across various industries, including those generally deemed less impacted by AI, declined. For instance, youth hiring rates in jobs with low AI exposure decreased from four percent in the six months preceding November 2022 to three percent in the six months preceding August 2026. Similarly, youth hiring rates in jobs more vulnerable to AI substitution fell from 3.2 percent to three percent over the same period.

Despite these declines in hiring, the study noted that hiring rates in coding-intensive jobs decreased from 2.5 percent to 1.9 percent between 2022 and 2026. However, Mehdi pointed out that hiring in this field had already risen above five percent around 2020 and 2021, likely due to firms adjusting their workforces during the pandemic. He also highlighted that overall employment growth for younger workers remained relatively weak during the post-pandemic period, regardless of their potential exposure to AI.

The findings of the study came at a time when there is growing apprehension about AI's potential impact on jobs. Last week, The Associated Press reported that Microsoft was offering voluntary buyouts to 60,000 employees in Canada, India, the United Kingdom, and the United States as the company heavily invests in AI. Viet Vu, the manager of economic research at The Dais, a think tank at Toronto Metropolitan University, echoed the study's findings, stating that he's not surprised by Statistics Canada's results and that they are part of a growing body of evidence suggesting that it is difficult to detect AI's impact on the Canadian labour market at this stage.

Vu suggested that the fear surrounding AI may stem from the technology's potential to impact every sector of the economy and its rapid pace of change, which outstrips the adaptability of the labour market. He also noted a significant concern among young people regarding the fundamental changes AI could bring to the "social contract of work."

Traditionally, individuals complete their education, gain experience in their respective fields, and use these experiences to secure their first job, which then leads to future employment opportunities until retirement.

Vu explained that if AI disrupts these middle steps, such as the transition from education to employment, it could have far-reaching consequences. However, studies like the Statistics Canada investigation can help dispel immediate fears and counter the existing "fearmongering" surrounding AI's impact on the workforce, Vu added. While these studies do not address people's unease about the future, they provide valuable insights into whether the projected scary scenarios may actually come to fruition and how society can respond appropriately.