IDEAS home Printed from https://ideas.repec.org/a/ucp/jhucap/doi10.1086-702926.html
   My bibliography  Save this article

The Rise of Services: The Role of Skills, Scale, and Female Labor Supply

Author

Listed:
  • Francisco J. Buera
  • Joseph P. Kaboski
  • Min Qiang Zhao

Abstract

This paper provides a quantitative analysis of the growth in the service share in the United States. We model households that make decisions on home and market production of services that vary in their skill intensity at any point in time and vary in their optimal scale over time. We also allow for skill- and sector-biased technology progress. The benchmark model fully accounts for the rise in the service share, with the rising scale of services, rising demand for skill-intensive output, and skill-biased technical change all playing dominant roles. Furthermore, the model with multiperson households confirms that the essential findings of our benchmark model are robust to demographic considerations. It can explain two-thirds of the increase in female labor supply, which also plays a role in services growth.

Suggested Citation

  • Francisco J. Buera & Joseph P. Kaboski & Min Qiang Zhao, 2019. "The Rise of Services: The Role of Skills, Scale, and Female Labor Supply," Journal of Human Capital, University of Chicago Press, vol. 13(2), pages 157-187.
    • Handle: RePEc:ucp:jhucap:doi:10.1086/702926
    DOI: 10.1086/702926
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/702926
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: http://dx.doi.org/10.1086/702926
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/702926?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Margarida Duarte & Diego Restuccia, 2010. "The Role of the Structural Transformation in Aggregate Productivity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(1), pages 129-173.
    2. Larry E. JONES & Rodolfo E. MANUELLI & Ellen R. McGRATTAN, 2015. "Why Are Married Women Working so much ?," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 81(1), pages 75-114, March.
    3. Francisco J. Buera & Joseph P. Kaboski, 2009. "Can Traditional Theories of Structural Change Fit The Data?," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 469-477, 04-05.
    4. Buera, Francisco J. & Kaboski, Joseph P., 2012. "Scale and the origins of structural change," Journal of Economic Theory, Elsevier, vol. 147(2), pages 684-712.
    5. 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 431-452, May.
    6. Goldin, Claudia, 2006. "The Quiet Revolution That Transformed Women’s Employment, Education, and Family," Scholarly Articles 2943933, Harvard University Department of Economics.
    7. Jeremy Greenwood & Ananth Seshadri & Mehmet Yorukoglu, 2005. "Engines of Liberation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(1), pages 109-133.
    8. Piyabha Kongsamut & Sergio Rebelo & Danyang Xie, 2001. "Beyond Balanced Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(4), pages 869-882.
    9. Mr. Sergio Rebelo & Ms. Piyabha Kongsamut & Danyang Xie, 2001. "Beyond Balanced Growth," IMF Working Papers 2001/085, International Monetary Fund.
    10. 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.
    11. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: U.S. Economic Growth in the Information Age," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 31(1), pages 125-236.
    12. L. Rachel Ngai & Christopher A. Pissarides, 2008. "Trends in Hours and Economic Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(2), pages 239-256, April.
    13. Daron Acemoglu & Veronica Guerrieri, 2008. "Capital Deepening and Nonbalanced Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 116(3), pages 467-498, June.
    14. Mark Aguiar & Erik Hurst, 2007. "Measuring Trends in Leisure: The Allocation of Time Over Five Decades," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 969-1006.
    15. Douglas Gollin & Stephen Parente & Richard Rogerson, 2002. "The Role of Agriculture in Development," American Economic Review, American Economic Association, vol. 92(2), pages 160-164, May.
    16. Claudia Goldin & Lawrence F. Katz & Ilyana Kuziemko, 2006. "The Homecoming of American College Women: The Reversal of the College Gender Gap," Journal of Economic Perspectives, American Economic Association, vol. 20(4), pages 133-156, Fall.
    17. Claudia Goldin, 2006. "The Quiet Revolution That Transformed Women's Employment, Education, and Family," American Economic Review, American Economic Association, vol. 96(2), pages 1-21, May.
    18. Donghoon Lee & Kenneth I. Wolpin, 2006. "Intersectoral Labor Mobility and the Growth of the Service Sector," Econometrica, Econometric Society, vol. 74(1), pages 1-46, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Doepke, M. & Tertilt, M., 2016. "Families in Macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 1789-1891, Elsevier.
    2. Doepke, Matthias & Hannusch, Anne & Kindermann, Fabian & Tertilt, Michèle, 2022. "The Economics of Fertility: A New Era," IZA Discussion Papers 15224, Institute of Labor Economics (IZA).
    3. Alexander Bick & Nicola Fuchs-Schündeln, 2018. "Taxation and Labour Supply of Married Couples across Countries: A Macroeconomic Analysis," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 85(3), pages 1543-1576.
    4. L. Rachel Ngai & Barbara Petrongolo, 2017. "Gender Gaps and the Rise of the Service Economy," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(4), pages 1-44, October.
    5. Roberto Roson & Dominique van der Mensbrugghe, 2017. "Demand-Driven Structural Change in Applied General Equilibrium Models," IEFE Working Papers 96, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    6. Fabio Cerina & Alessio Moro & Michelle Rendall, 2021. "The Role Of Gender In Employment Polarization," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 62(4), pages 1655-1691, November.
    7. Timo Boppart & L. Rachel Ngai, 2021. "Rising inequality and trends in leisure," Journal of Economic Growth, Springer, vol. 26(2), pages 153-185, June.
    8. Claudia Olivetti & Barbara Petrongolo, 2016. "The Evolution of Gender Gaps in Industrialized Countries," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 405-434, October.
    9. Bick, Alexander & Brüggemann, Bettina & Fuchs-Schündeln, Nicola & Paule-Paludkiewicz, Hannah, 2019. "Long-term changes in married couples' labor supply and taxes: Evidence from the US and Europe since the 1980s," Journal of International Economics, Elsevier, vol. 118(C), pages 44-62.
    10. Michelle Rendall, 2018. "Female Market Work, Tax Regimes, and the Rise of the Service Sector," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 28, pages 269-289, April.
    11. Morchio, Iacopo & Moser, Christian, 2018. "The Gender Pay Gap: Micro Sources and Macro Consequences," MPRA Paper 99276, University Library of Munich, Germany, revised 24 Mar 2020.
    12. Claudia Olivetti & Rachel Ngai, 2015. "Structural Transformation and the U-Shaped Female Labor Supply," 2015 Meeting Papers 1501, Society for Economic Dynamics.
    13. Lee, Jongkwan & Shim, Myungkyu & Yang, Hee-Seung, 2022. "The rise of low-skill service employment: The role of dual-earner households," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 255-273.
    14. Michael Bar & Moshe Hazan & Oksana Leukhina & David Weiss & Hosny Zoabi, 2018. "Why did rich families increase their fertility? Inequality and marketization of child care," Journal of Economic Growth, Springer, vol. 23(4), pages 427-463, December.
    15. Roson, Roberto & van der Mensbrugghe, Dominique, 2017. "Demand-Driven Structural Change in Applied General Equilibrium Models," Conference papers 332902, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    16. Bridgman, Benjamin, 2016. "Home productivity," Journal of Economic Dynamics and Control, Elsevier, vol. 71(C), pages 60-76.
    17. Andrés Álvarez & Camilo Gómez & Hernando Zuleta, 2019. "Bequests, Imperfections in Factor Markets, and Long-Run Inequality: A Theoretical Assessment of Piketty," Documentos CEDE 17674, Universidad de los Andes, Facultad de Economía, CEDE.
    18. So Kubota, 2020. "Culture, Gender, and Structural Transformation: The Case of Turkey," Working Papers 1925, Waseda University, Faculty of Political Science and Economics.
    19. Michelle Rendall, 2018. "Female Market Work, Tax Regimes, and the Rise of the Service Sector," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 28, pages 269-289, April.
    20. Claudia Olivetti & Barbara Petrongolo, 2016. "The Evolution of Gender Gaps in Industrialized Countries," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 405-434, October.
    21. Morchio, Iacopo & Moser, Christian, 2018. "The Gender Pay Gap: Micro Sources and Macro Consequences," MPRA Paper 99276, University Library of Munich, Germany, revised 24 Mar 2020.
    22. Roberto Roson & Dominique van der Mensbrugghe, 2017. "Assessing Long Run Structural Change in Multi-Sector General Equilibrium Models," EcoMod2017 10257, EcoMod.
    23. Todd Schoellman & Bart Hobijn, 2017. "Structural Transformation by Cohort," 2017 Meeting Papers 1417, Society for Economic Dynamics.
    24. Murat Üngör & M. Koray Kalafatcılar, 2014. "Productivity, Demographics, and Growth in Turkey: 2004-12," Ekonomi-tek - International Economics Journal, Turkish Economic Association, vol. 3(1), pages 23-56, January.
    25. Pierre‐Richard Agénor & Kamer K. Ozdemir & Emmanuel Pinto Moreira, 2021. "Gender Gaps in the Labour Market and Economic Growth," Economica, London School of Economics and Political Science, vol. 88(350), pages 235-270, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941, Elsevier.
    2. L. Rachel Ngai & Barbara Petrongolo, 2017. "Gender Gaps and the Rise of the Service Economy," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(4), pages 1-44, October.
    3. Min Qiang (Kent) Zhao & Joseph Kaboski & Francisco Buera, 2013. "Quantifying the Growth in Services: the Role of Skills, Scale, and Female Labor Supply," 2013 Meeting Papers 277, Society for Economic Dynamics.
    4. Buera, Francisco J. & Kaboski, Joseph P., 2012. "Scale and the origins of structural change," Journal of Economic Theory, Elsevier, vol. 147(2), pages 684-712.
    5. Liao, Junmin, 2020. "The rise of the service sector in China," China Economic Review, Elsevier, vol. 59(C).
    6. Ho, Chi Pui, 2015. "Population growth and structural transformation," MPRA Paper 68014, University Library of Munich, Germany.
    7. Bridgman, Benjamin & Duernecker, Georg & Herrendorf, Berthold, 2018. "Structural transformation, marketization, and household production around the world," Journal of Development Economics, Elsevier, vol. 133(C), pages 102-126.
    8. Margarida Duarte & Diego Restuccia, 2020. "Relative Prices and Sectoral Productivity," Journal of the European Economic Association, European Economic Association, vol. 18(3), pages 1400-1443.
    9. Lifeng Zhang, 2015. "A Multi-sector Model of Public Expenditure and Growth," Journal of Economics, Springer, vol. 115(1), pages 73-93, May.
    10. Berlingieri, Giuseppe, 2013. "Outsourcing and the rise in services," LSE Research Online Documents on Economics 51532, London School of Economics and Political Science, LSE Library.
    11. Berthold Herrendorf & Richard Rogerson & ?kos Valentinyi, 2013. "Two Perspectives on Preferences and Structural Transformation," American Economic Review, American Economic Association, vol. 103(7), pages 2752-2789, December.
    12. Murat Ungor, 2017. "Productivity Growth and Labor Reallocation: Latin America versus East Asia," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 24, pages 25-42, March.
    13. Diego Comin & Danial Lashkari & Martí Mestieri, 2021. "Structural Change With Long‐Run Income and Price Effects," Econometrica, Econometric Society, vol. 89(1), pages 311-374, January.
    14. Uy, Timothy & Yi, Kei-Mu & Zhang, Jing, 2013. "Structural change in an open economy," Journal of Monetary Economics, Elsevier, vol. 60(6), pages 667-682.
    15. Akbulut, Rahşan, 2011. "Sectoral Changes And The Increase In Women'S Labor Force Participation," Macroeconomic Dynamics, Cambridge University Press, vol. 15(2), pages 240-264, April.
    16. Marti Mestieri & Danial Lashkari & Diego Comin, 2015. "Structural Transformations with Long-Run Price and Income Effects," 2015 Meeting Papers 437, Society for Economic Dynamics.
    17. Edgar Cruz & Xavier Raurich, 2020. "Leisure time and the sectoral composition of employment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 38, pages 198-219, October.
    18. Gangopadhyay, Kausik & Mondal, Debasis, 2021. "Productivity, relative sectoral prices, and total factor productivity: Theory and evidence," Economic Modelling, Elsevier, vol. 100(C).
    19. Alvarez-Cuadrado, Francisco & Long, Ngo Van & Poschke, Markus, 2018. "Capital-labor substitution, structural change and the labor income share," Journal of Economic Dynamics and Control, Elsevier, vol. 87(C), pages 206-231.
    20. Ju, Jiandong & Lin, Justin Yifu & Wang, Yong, 2015. "Endowment structures, industrial dynamics, and economic growth," Journal of Monetary Economics, Elsevier, vol. 76(C), pages 244-263.

    More about this item

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jhucap:doi:10.1086/702926. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JHC .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.