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Services, Skill and Labor Supply: A Cross-Country Perspective

Author

Listed:
  • Richard Rogerson

    (Princeton University)

  • Joseph Kaboski

    (University of Notre Dame)

  • Francisco Buera

    (University of California at Los Angeles)

Abstract

This paper examines the role of the market for high-skilled labor in explaining variation in the levels and dynamics of the service share, home production time, and market labor across countries. We establish and extend key facts for a cross-section of countries. First, growth in the total share of services is almost exclusively accounted for by growth in skill-intensive services. Second, high-skilled worker have higher rates of market labor supply and spend less time in home production, particularly for women. Third, labor force participation rates follow a similar pattern. These patterns are closely linked to income per capita. We then develop a model with high- and low-skilled workers and services that are either skill-intensive or not. Households make decisions between market and home production. We evaluate the model vis-a-vis the above patterns and use it to quantify cross-country differences in the service share and labor supply.

Suggested Citation

  • Richard Rogerson & Joseph Kaboski & Francisco Buera, 2013. "Services, Skill and Labor Supply: A Cross-Country Perspective," 2013 Meeting Papers 1033, Society for Economic Dynamics.
    • Handle: RePEc:red:sed013:1033
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