Economic Growth and the Rise of Service Employment
AbstractThe distribution of employment among Agriculture, Industry, and Service within countries is closely related to the level of real Gross Domestic Product per capita. As real income rises, Agriculture's share falls, Service employment rises, and Industryâ€™s share rises to a peak at about $3,300 (1970 dollars) per capita and then declines. U.S. time series and OECD cross-sections follow almost identical patterns of employment change. The decline of Agriculture is attributable primarily to differences in income elasticity of demand but the shift from Industry to Service is attributable primarily to differential rates of growth of output per worker. Economic growth also contributes to the rise of service employment through an increase in female labor force participation because families with working wives tend to spend a higher proportion of their income on services. Productivity tends to grow less rapidly in the Service sector than in the rest of the economy, but the shift of employment to Services was not a major factor in the slowing of aggregate productivity in the United States in the 1970's.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0486.
Date of creation: Jun 1980
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Publication status: published as Fuchs, Victor R. "Economic Growth and the Rise of Service Employment." Towards an Explanation of Economic Growth, edited by Herbert Giersch, pp. 221-2 52. Tubingen, West Germany: J.C.B. Mohr (Paul Siebeck), 1981.
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"Sectoral Explanations of Employment in Europe: The Role of Services,"
IZA Discussion Papers
2257, Institute for the Study of Labor (IZA).
- D’Agostino, Antonello & Serafini, Roberta & Ward-Warmedinger, Melanie, 2006. "Sectoral explanations of employment in Europe: the role of services," Working Paper Series, European Central Bank 0625, European Central Bank.
- D'Agostino, Antonello & Serafini, Roberta & Ward, Melanie, 2006. "Sectoral explanations of employment in Europe: the role of services," Research Technical Papers 8/RT/06, Central Bank of Ireland.
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