Trends in firm entry and new entrepreneurship in Canada /

The decline of the entry rate was the fastest in the 1980s to the early 1990s, and in the late 1990s. [...] In most sectors, the firm entry rate declined at a fast pace in the 1980s and in the late 1990s, whereas it was more stable in the mid-1990s and in the 2000s (similar to Chart 1). [...] We define new entrepreneurship as the number of new self-employed workers who hire employees.8 The number of new entrepreneurs (Chart 2) and the rate of new entrepreneurship, defined as the number of new entrepreneurs as a fraction of the working-age population (Chart 3), have both been declining.9 Chart 3: Both the new entrepreneurship rate and the firm entry rate have been declining Annual data [...] Has the decline in the rate of new entrepreneurship been driven by variations in the number of individuals entering the labour force? [...] Fixing the weights of sectors at the reference year level, the “within” effect captures the contribution of changes in the entry rates within sectors.15 The “between” effect captures the contribution of shifts between sectors assuming the entry rates did not change over time.