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High-Skilled Services and Development in China

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  • Lei Fang
  • Berthold Herrendorf

Abstract

We document that the employment share of high-skill-intensive services is much lower in China than in countries with similar gross domestic product (GDP) per capita. We build a model of structural change with goods and low- and high-skill-intensive services to account for this observation. We find that large distortions limit the size of high-skill-intensive services in China. If they were removed, both high-skill-intensive services and GDP per capita would increase considerably. We document a strong presence of state-owned enterprises in high-skill-intensive services and argue that this presence leads to important distortions.

Suggested Citation

  • Lei Fang & Berthold Herrendorf, 2019. "High-Skilled Services and Development in China," FRB Atlanta Working Paper 2019-21, Federal Reserve Bank of Atlanta.
    • Handle: RePEc:fip:fedawp:2019-21
    DOI: 10.29338/wp2019-21
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    2. Holger Sieg & Chamna Yoon & Jipeng Zhang, 2020. "The Impact of Migration Controls on Urban Fiscal Policies and the Intergenerational Transmission of Human Capital in China," NBER Working Papers 27764, National Bureau of Economic Research, Inc.
    3. Fu Qiao & Yan Yan, 2020. "How does stock market reflect the change in economic demand? A study on the industry-specific volatility spillover networks of China's stock market during the outbreak of COVID-19," Papers 2007.07487, arXiv.org.
    4. Duc Nguyen, 2022. "Heterogeneous Paths of Structural Transformation," Working Papers tecipa-742, University of Toronto, Department of Economics.

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    More about this item

    Keywords

    mortgage defaults; foreclosures; externality; policy; vacancy;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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