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The growth of the service sector and demand for services

Author

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  • Eliana Viviano

    (Bank of Italy)

Abstract

In this paper I present evidence about the importance of demand for services in the development of the service sector. By comparing developments in demand for services in Italy, France, Germany and the US, I show that the contribution of final demand by European households to growth in output is less than that made by US households. In Europe, the share of output produced by market services and utilized by the manufacturing sector is almost twice as high as the average value recorded in the US. The manufacturing sector, however, tends to consume services requiring low-skilled workers such as distribution services and inland transportation. Compared with European countries, the higher growth rate of market services in the US (and of services requiring highly-skilled workers) is then due to higher demand by US households.

Suggested Citation

  • Eliana Viviano, 2015. "The growth of the service sector and demand for services," Questioni di Economia e Finanza (Occasional Papers) 290, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_290_15
    as

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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2015-0290/QEF_290_15.pdf
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    References listed on IDEAS

    as
    1. Guglielmo Barone & Federico Cingano, 2011. "Service Regulation and Growth: Evidence from OECD Countries," Economic Journal, Royal Economic Society, vol. 121(555), pages 931-957, September.
    2. Francisco J. Buera & Joseph P. Kaboski, 2012. "The Rise of the Service Economy," American Economic Review, American Economic Association, vol. 102(6), pages 2540-2569, October.
    3. Leroy P. Jones, 1976. "The Measurement of Hirschmanian Linkages," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(2), pages 323-333.
    4. Fabiano Schivardi & Eliana Viviano, 2011. "Entry Barriers in Retail Trade," Economic Journal, Royal Economic Society, vol. 121(551), pages 145-170, March.
    5. Erik Dietzenbacher & Umed Temurshoev, 2012. "Input-output impact analysis in current or constant prices: does it matter?," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 1(1), pages 1-18, December.
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    More about this item

    Keywords

    service sector; demand for services; input-output; tertiarization;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts

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