With smaller cohorts of youth entering the labour market, relative to the size of the existing workforce, training of the cohorts already in the workforce is likely to become an increasingly important source of skills for the Canadian economy. [...] Page 7 The Labour Market and Skills Implications of Population Aging in Canada 3. Population Aging, Productivity and Growth in Living Standards Predicting how population and workforce aging will affect labour markets and the availability of skills requires modelling the intertwined dynamics of the economy, the labour market and individuals’ skill investment decisions. [...] Economic models have become increasingly sophisticated, allowing policy analysts to explore the various consequences of changes in the characteristics of the population on the economy and the labour market. [...] Skills Research Initiative The Labour Market and Skills Implications of Population Aging in Canada One potential downside of targeting highly skilled immigrants is that raising the supply of skilled workers in the economy could reduce the skill premium and the return to investment in education, potentially leading to lower levels of skill investment by Canadian youth.2 These research findings rais [...] Skills Research Initiative The Labour Market and Skills Implications of Population Aging in Canada Most of the policy options to remove work disincentives or retain older workers discussed above may increase the flexibility in the labour market and support the participation of older workers who wish to work longer.