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A Comparison of Job Creation and Job Destruction in Canada and the United States

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  • John Baldwin
  • Timothy Dunne
  • John Haltiwanger

Abstract

In recent years a growing number of countries have constructed data series on job creation and job destruction using establishment- level data sets. This paper provides a description and detailed comparison of these new data series for the United States and Canada. First, the Canadian and United States industry-level job creation and destruction rates are remarkably similar. Industries with high (low) job creation in the U.S. exhibit high (low) job creation in Canada. The same is true for job destruction. In addition, the overall magnitude of gross job flows in the two countries is comparable. Second, the time-series patterns of creation and destruction are qualitatively similar but do differ in a number of important respects. In both countries, job destruction is much more cyclically volatile than job creation. This cyclical asymmetry is, however, more pronounced in the United States. The paper finishes with a characterization of the job flow patterns using a modified Blanchard and Diamond (1992) model.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4726.

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Date of creation: May 1994
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Publication status: published as Review of Economics and Statistics, Vol. 80, no. 3 (August 1998): 347-356.
Handle: RePEc:nbr:nberwo:4726

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  1. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262540932, December.
  2. Schmalensee, Richard., 1987. "Inter-industry studies of structure and performance," Working papers, Massachusetts Institute of Technology (MIT), Sloan School of Management 1874-87., Massachusetts Institute of Technology (MIT), Sloan School of Management.
  3. John R. Baldwin & Paul K. Gorecki, 1990. "Firm Entry and Exit in the Canadian Manufacturing Sector," Working Papers, Queen's University, Department of Economics 767, Queen's University, Department of Economics.
  4. Steve J. Davis & John Haltiwanger, 1991. "Gross job creation, gross job destruction and employment reallocation," Working Paper Series, Macroeconomic Issues, Federal Reserve Bank of Chicago 91-5, Federal Reserve Bank of Chicago.
  5. Blanchard, Olivier Jean & Diamond, Peter, 1992. "The Flow Approach to Labor Markets," American Economic Review, American Economic Association, American Economic Association, vol. 82(2), pages 354-59, May.
  6. Dale Mortensen & Christopher Pissarides, 1992. "The Cyclical Behavior of Job Creation and Job Destruction," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 982, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  7. Caballero, Ricardo J & Hammour, Mohamad L, 1994. "The Cleansing Effect of Recessions," American Economic Review, American Economic Association, American Economic Association, vol. 84(5), pages 1350-68, December.
  8. John R. Baldwin & Paul K. Gorecki, 1991. "Firm Entry and Exit in the Canadian Manufacturing Sector, 1970-1982," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 24(2), pages 300-323, May.
  9. Steven J. Davis & John Haltiwanger, 1990. "Gross Job Creation and Destruction: Microeconomic Evidence and Macroeconomic Implications," NBER Chapters, National Bureau of Economic Research, Inc, in: NBER Macroeconomics Annual 1990, Volume 5, pages 123-186 National Bureau of Economic Research, Inc.
  10. Jonathan S. Leonard, 1986. "In the Wrong Place at the Wrong Time: The Extent of Frictional and Structural Unemployment," NBER Working Papers, National Bureau of Economic Research, Inc 1979, National Bureau of Economic Research, Inc.
  11. Baldwin, John R. & Gorecki, Paul K., 1987. "Plant creation versus plant acquisition : The entry process in canadian manufacturing," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 5(1), pages 27-41, March.
  12. Dunne, T. & Roberts, M.J. & Samuelson L., 1988. "Plant Turnover And Gross Employment Flows In The U.S. Manufacturing Sector," Papers, Pennsylvania State - Department of Economics 9-87-7, Pennsylvania State - Department of Economics.
  13. John Haltiwanger & Steven J Davis & Scott Schuh, 1991. "Published Versus Sample Statistics From The ASM: Implications For The LRD," Working Papers, Center for Economic Studies, U.S. Census Bureau 91-1, Center for Economic Studies, U.S. Census Bureau.
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