Human Capital and Growth in a Services Economy: the Case of Portugal
AbstractThe persistence of relative low aggregate income and productivity levels and performance in Portugal might be linked to the strong weight of services, and especially traditional stagnant personal services, which have fewer opportunities for enhancing its productivity. The so-called modern progressive services, such as financial and business services and communications, on the other hand, have registered higher labor productivity levels, since they are more receptive to the use of information technologies and are increasingly tradable across borders. However, these services sub-sectors demand higher levels of human capital and so the relatively low educational levels of the Portuguese workforce might have prevented Portugal from capitalizing on the opportunities provided by modern services growth and continue to do so in the future. In order to shed some light on these interactions we investigate the existence of causality among sectoral productivity, services sector expansion, human capital, and aggregate productivity over the period 1970-2006 in the Portuguese economy. The evidence suggests bi-directional causality only between sectoral and aggregate productivity, with sectoral employment shares and human capital not revealing themselves as relevant for the explanation of the other variables nor being influenced by them. Across services sub-sectors, community social and personal services seem to be the most influential sector, making a positive and lasting contribution to aggregate productivity, and this seems to be the reason why, at a higher level of aggregation, non-market services appear thus as positive contributor to aggregate productivity, while market services have no influence.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by GEMF - Faculdade de Economia, Universidade de Coimbra in its series GEMF Working Papers with number 2013-21.
Length: 48 pages
Date of creation: Sep 2013
Date of revision:
services; human capital; growth; Portugal;
Find related papers by JEL classification:
- L8 - Industrial Organization - - Industry Studies: Services
- O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-11 (All new papers)
- NEP-CSE-2013-10-11 (Economics of Strategic Management)
- NEP-HRM-2013-10-11 (Human Capital & Human Resource Management)
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.:
- Ester Gomes da Silva, 2011. "Portugal and Spain: catching up and falling behind. A comparative analysis of productivity trends and their causes, 1980-2007," FEP Working Papers 409, Universidade do Porto, Faculdade de Economia do Porto.
- Andreas Dietrich, 2009.
"Does Growth Cause Structural Change, or Is it the Other Way Round? A Dynamic Panel Data Analyses for Seven OECD Countries,"
Jena Economic Research Papers
2009-034, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
- Andreas Dietrich, 2012. "Does growth cause structural change, or is it the other way around? A dynamic panel data analysis for seven OECD countries," Empirical Economics, Springer, vol. 43(3), pages 915-944, December.
- L. Rachel Ngai & Christopher Pissarides, 2005.
"Structural change in a multi-sector model of growth,"
LSE Research Online Documents on Economics
4656, London School of Economics and Political Science, LSE Library.
- L. Rachel Ngai & Christopher A. Pissarides, 2007. "Structural Change in a Multisector Model of Growth," American Economic Review, American Economic Association, vol. 97(1), pages 429-443, March.
- Ngai, L. Rachel & Pissarides, Christopher A., 2005. "Structural Change in a Multi-Sector Model of Growth," IZA Discussion Papers 1800, Institute for the Study of Labor (IZA).
- L. Rachel Ngai & Christopher Pissarides, 2004. "Structural change in a multi-sector model of growth," LSE Research Online Documents on Economics 3550, London School of Economics and Political Science, LSE Library.
- Ngai, Liwa Rachel & Pissarides, Christopher, 2004. "Structural Change in a Multi-Sector Model of Growth," CEPR Discussion Papers 4763, C.E.P.R. Discussion Papers.
- L. Rachel Ngai & Christopher Pissarides, 2007. "Structural change in a multi-sector model of growth," LSE Research Online Documents on Economics 4468, London School of Economics and Political Science, LSE Library.
- Ester Gomes da Silva & Aurora A.C. Teixeira, 2009.
"Does structure influence growth? A panel data econometric assessment of ‘relatively less developed’ countries, 1979-2003,"
FEP Working Papers
316, Universidade do Porto, Faculdade de Economia do Porto.
- Ester G. Silva & Aurora A. C. Teixeira, 2011. "Does structure influence growth? A panel data econometric assessment of "relatively less developed" countries, 1979--2003," Industrial and Corporate Change, Oxford University Press, vol. 20(2), pages 457-510, April.
- Maroto-Sánchez, Andrés & Cuadrado-Roura, Juan R., 2009. "Is growth of services an obstacle to productivity growth? A comparative analysis," Structural Change and Economic Dynamics, Elsevier, vol. 20(4), pages 254-265, December.
- Daron Acemoglu & Veronica Guerrieri, 2006.
"Capital Deepening and Non-Balanced Economic Growth,"
NBER Working Papers
12475, National Bureau of Economic Research, Inc.
- Daron Acemoglu & Veronica Guerrieri, 2006. "Capital Deepening and Non-Balanced Economic Growth," 2006 Meeting Papers 207, Society for Economic Dynamics.
- Ejaz Ghani & Homi Kharas, 2010.
"The Service Revolution,"
World Bank Other Operational Studies
10187, The World Bank.
- Mary O'Mahony & Marcel P. Timmer, 2009. "Output, Input and Productivity Measures at the Industry Level: The EU KLEMS Database," Economic Journal, Royal Economic Society, vol. 119(538), pages F374-F403, 06.
- Kapur, Basant K., 2012. "Progressive services, asymptotically stagnant services, and manufacturing: Growth and structural change," Journal of Economic Dynamics and Control, Elsevier, vol. 36(9), pages 1322-1339.
- Dale W. Jorgenson & Marcel P. Timmer, 2011.
"Structural Change in Advanced Nations: A New Set of Stylised Facts,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 113(1), pages 1-29, 03.
- Jorgenson, D.W. & Timmer, Marcel, 2010. "Structural Change in Advanced Nations: A New Set of Stylised Facts," GGDC Research Memorandum GD-115, Groningen Growth and Development Centre, University of Groningen.
- Margarida Duarte & Diego Restuccia, 2007.
"The structural transformation and aggregate productivity in Portugal,"
Portuguese Economic Journal,
Springer, vol. 6(1), pages 23-46, April.
- Margarida Duarte & Diego Restuccia, 2006. "The Structural Transformation and Aggregate Productivity in Portugal," Working Papers tecipa-261, University of Toronto, Department of Economics.
- Echevarria, Cristina, 1997. "Changes in Sectoral Composition Associated with Economic Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(2), pages 431-52, May.
- Gable, Susanna Lundstrom & Mishra, Saurabh, 2011. "Service Export sophistication and Europe's new growth model," Policy Research Working Paper Series 5793, The World Bank.
- Benoit Desmarchelier & Faridah Djellal & Faïz Gallouj, 2012.
"Knowledge intensive business services and long term growth,"
- Desmarchelier, Benoît & Djellal, Faridah & Gallouj, Faïz, 2013. "Knowledge intensive business services and long term growth," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 188-205.
- Michael Peneder, 2007. "A sectoral taxonomy of educational intensity," Empirica, Springer, vol. 34(3), pages 189-212, July.
- Jochen Hartwig, 2010.
"Testing the growth effects of structural change,"
KOF Working papers
10-264, KOF Swiss Economic Institute, ETH Zurich.
- Bonatti, Luigi & Felice, Giulia, 2008. "Endogenous growth and changing sectoral composition in advanced economies," Structural Change and Economic Dynamics, Elsevier, vol. 19(2), pages 109-131, June.
- Foellmi, Reto & Zweimüller, Josef, 2008. "Structural change, Engel's consumption cycles and Kaldor's facts of economic growth," Journal of Monetary Economics, Elsevier, vol. 55(7), pages 1317-1328, October.
- Peneder, Michael, 2003.
"Industrial structure and aggregate growth,"
Structural Change and Economic Dynamics,
Elsevier, vol. 14(4), pages 427-448, December.
- Pugno, Maurizio, 2006.
"The service paradox and endogenous economic growth,"
Structural Change and Economic Dynamics,
Elsevier, vol. 17(1), pages 99-115, January.
- Maurizio Pugno, 2003. "The service paradox and endogenous economic growth," Department of Economics Working Papers 0301, Department of Economics, University of Trento, Italia.
- Uppenberg, Kristian & Strauss, Hubert, 2010. "Innovation and productivity growth in the EU services sector," EIB Economic Surveys, European Investment Bank, number 2.
- El Khoury, Antoine C. & Savvides, Andreas, 2006. "Openness in services trade and economic growth," Economics Letters, Elsevier, vol. 92(2), pages 277-283, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sara Santos).
If references are entirely missing, you can add them using this form.