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Sectoral Explanations of Employment in Europe: The Role of Services

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Author Info

  • D'Agostino, Antonello

    ()
    (Central Bank and Financial Service Authority of Ireland)

  • Serafini, Roberta

    ()
    (European Central Bank)

  • Ward-Warmedinger, Melanie E.

    ()
    (European Central Bank)

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.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2257.

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Length: 56 pages
Date of creation: Aug 2006
Date of revision:
Handle: RePEc:iza:izadps:dp2257

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Keywords: services; sectoral adjustment; employment share; Europe; US; institutions in the labour and product market;

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References

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Citations

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Cited by:
  1. Bachmann, Ronald & Burda, Michael C., 2008. "Sectoral Transformation, Turbulence, and Labor Market Dynamics in Germany," IZA Discussion Papers 3324, Institute for the Study of Labor (IZA).
  2. Luigi Bonatti, 2007. "Home production, labor taxation and trade account," Department of Economics Working Papers 0715, Department of Economics, University of Trento, Italia.
  3. Ad van Riet & Moreno Roma, 2006. "Competition, productivity and prices in the euro area services sector," Occasional Paper Series 44, European Central Bank.
  4. Metka Stare & Andreja Jaklič, 2011. "Towards Explaining Growth of Private and Public services in the Emerging Market Economies," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 13(30), pages 581-598, June.

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