A growing trend toward knowledge work in Canada

Abstract

This paper answers three questions related to the growing trend toward knowledge occupations in Canada: (i) What was the magnitude of the trend between 1971 and 1996? (ii) Was the trend a widespread phenomenon or was it restricted to specific industries? (iii) What are the proximate causes of the trends? Using five censuses—1971, 1981, 1986, 1991, 1996—and the input/output (I/O) data, the paper provides evidence that the Canadian economy is becoming increasingly knowledge-based, although the upgrading trends differ across knowledge occupations. Moreover, we find that this phenomenon is spread across all industrial sectors. Finally, using a decomposition analysis borrowed from Wolff and Baumol, three factors—the substitution effect, the productivity-lag effect and the demand effect—have been examined in order to shed some light on these trends. We find that these effects vary according to the nature of the knowledge involved in these different groups of occupations, thus reflecting not only the importance of the technological change ‘skill bias’ but also the increasing complexity of controlling and managing the new economic activities.