THE IMPACT OF REGIONAL AGE DISTRIBUTION ON ENTREPRENEURSHIP IN CANADA

Weiqiu Yu
University of New Brunswick

Liang Ma
University of Alberta

ABSTRACT

A sustained decline in mortality and fertility rates during the twentieth century has
resulted in a shift towards older populations worldwide. Ageing is directly impacts business and
the overall economy of a nation. Some studies have shown that the decision to become an
entrepreneur is a regional phenomenon. A study explored the effect of demographic factors and
aging on business startups in Germany using an aggregate data set and found an inverse U-
shaped relationship between the regional age distribution and start-up activity in a region. This
paper examines the relationship between age distribution and regional business activities in
Canada using a longitudinal data set from 1988 to 2014. Results confirm that differences in the
age distribution contribute to the variation in the business activities in Canada. Moreover, our
findings suggest that the age-specific likelihood of becoming an entrepreneur changes over time,
indicating the existence of age-specific peer effects in Canada.
Keywords: Aging, age distribution, entrepreneurship, fixed effect estimation, regional, longitudinal, peer effects,
Canada