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Sectoral explanations of employment in Europe - the role of services

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Author Info
Antonello D’Agostino () (Central Bank and Financial Service Authority of Ireland, PO Box 559, Dame Street, Dublin 2, Ireland.)
Roberta Serafini () (ISAE and European Central Bank, Kaiserstrasse 29, 60311, Frankfurt am Main, Germany.)
Melanie Ward-Warmedinger () (IZA and European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.)

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Abstract

This paper investigates the determinants of the service sector employment share in the EU-15, for the aggregate service sector, four sub-sectors and twelve service sector branches. Recently, both Europe and the US have experienced an increase in the share of service-related jobs in total employment. Although converging in all European countries, a significant gap in the share of service jobs in Europe relative to the US persists. Understanding the main factors behind this gap is key to achieving higher employment levels in Europe. This paper focuses on the role of barriers in the EU-15 which may have hindered its ability to absorb labour supply and therefore to adjust efficiently to the sectoral reallocation of labour. We find that a crucial role in this process has been played by the institutional framework affecting flexibility in the labour market and by the mismatch between workers’ skills and job vacancies. JEL Classification: E24; J21; J23; J24; L80.

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Paper provided by European Central Bank in its series Working Paper Series with number 625.

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Length: 59 pages
Date of creation: May 2006
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Handle: RePEc:ecb:ecbwps:20060625

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Related research
Keywords: Services; sectoral adjustment; employment share; Europe; US; institutions in the labour and product market.;

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  25. Michèle Belot & Jan C. van Ours, 2004. "Does the recent success of some OECD countries in lowering their unemployment rates lie in the clever design of their labor market reforms?," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 621-642, October. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Luigi Bonatti, 2007. "Home production, labor taxation and trade account," Department of Economics Working Papers 0715, Department of Economics, University of Trento, Italia. [Downloadable!]
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