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The Changing Pace of Labour Reallocation in Canada: Causes and Consequences

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The number of job gains and losses across firms in Canada each year is roughly one-fifth the total number of jobs and generally occurs within sectors (industries) rather than across sectors. Since labour reallocation within sectors has been strongly related to productivity growth in Canada, defining the key drivers of this type of reallocation is important, given the higher rates of reallocation and productivity growth in the Untied States than in Canada. This article finds that the appreciation of the Canadian dollar and rising commodity prices led to above-average reallocation of labour across sectors over the 2005-08 period, but that the impact on productivity has been minor. Labour reallocation across firms, however, generates substantial labour productivity gains in manufacturing and the business sector as a whole.

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  • Danny Leung & Shutao Cao, 2009. "The Changing Pace of Labour Reallocation in Canada: Causes and Consequences," Bank of Canada Review, Bank of Canada, vol. 2009(Summer), pages 31-42.
  • Handle: RePEc:bca:bcarev:v:2009:y:2009:i:summer09:p:31-42
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    Cited by:

    1. Evan Capeluck, 2015. "Explanations of the Decline in Manufacturing Employment in Canada," CSLS Research Reports 2015-17, Centre for the Study of Living Standards.

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