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Producer Services, Productivity, And Metropolitan Income

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  • Niles Hansen

    (University of Texas at Austin)

Abstract

It is frequently argued that significant productivity increases require a strong and expanding manufacturing sector, and that the rapid growth of the services sector has been a drag on productivity. It is argued here that in an increasingly information-oriented economy, producer services-whether performed within manufacturing firms or by independent, specialized enterprises-play a pivotal role in expanding the division of labor, which in turn generates greater productivity and increasing incomes. The study utilizes data from the 1987 economic censuses. The results confirm and reinforce earlier evidence that the density of metropolitan producer services has a highly significant and positive association with per capita metropolitan income (as well as per capita metropolitan earnings), even when the relationship is controlled for level of education and for metropolitan population size, each of which also makes a positive and significant contribution.

Suggested Citation

  • Niles Hansen, 1993. "Producer Services, Productivity, And Metropolitan Income," The Review of Regional Studies, Southern Regional Science Association, vol. 23(3), pages 255-264, Winter.
    • Handle: RePEc:rre:publsh:v23:y:1993:i:3:p:255-264
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    References listed on IDEAS

    as
    1. Magee,Stephen P. & Brock,William A. & Young,Leslie, 1989. "Black Hole Tariffs and Endogenous Policy Theory," Cambridge Books, Cambridge University Press, number 9780521377003.
    2. W. Richard Goe & James L. Shanahan, 1990. "A Conceptual Approach for Examining Service Sector Growth in Urban Economies: Issues and Problems in Analyzing the Service Economy," Economic Development Quarterly, , vol. 4(2), pages 144-153, May.
    3. Bound, John & Johnson, George, 1992. "Changes in the Structure of Wages in the 1980's: An Evaluation of Alternative Explanations," American Economic Review, American Economic Association, vol. 82(3), pages 371-392, June.
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    Cited by:

    1. Carlo Altomonte & Laura Resmini, 2001. "Multinational Corporations as Catalyst for Industrial Development: The Case of Poland," William Davidson Institute Working Papers Series 368, William Davidson Institute at the University of Michigan.
    2. Rashmi Banga, 2005. "Role of Services in the Growth Process: A Survey," Indian Council for Research on International Economic Relations, New Delhi Working Papers 159, Indian Council for Research on International Economic Relations, New Delhi, India.

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