The Distribution of Employment Growth Rates in Canada: The Role of High-Growth and Rapidly Shrinking Firms

This paper uses data from Statistics Canada's Longitudinal Employment Analysis Program database to study the distribution of annual employment growth rates in Canada over the 2000-to-2009 period, with a special emphasis on firms in the tails of the distribution, referred to here as High-Growth Firms (HGFs) and Rapidly Shrinking Firms (RSFs). The study has three objectives. First, it describes the distributions of employment growth rates in Canada to see whether they are consistent with observations in other countries. Second, it quantifies the contribution of HGFs and RSFs to aggregate job creation and destruction. The third objective is to examine, using quantile regression techniques, the role of firm size and firm age in the performance of HGFs and RSFs.