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Quantifying the Growth in Services: the Role of Skills, Scale, and Female Labor Supply

Listed author(s):
  • Min Qiang (Kent) Zhao

    (Xiamen University)

  • Joseph Kaboski

    (University of Notre Dame)

  • Francisco Buera

    (University of California at Los Angeles)

This paper quanties the role that increases in the demand for skill intensive goods and services, the ecient scale of production of services, and female labor supply have in explaining the growth of services. We extend the model in Buera and Kaboski (2012a,b) to a two-person household model, incorporating a joint household decision on home and market production into the model, and allow for skill and sectoral biased technology progress. The calibrated analysis shows that the channels emphasized in the theory are quantitatively important. The rising scale of services, the rising demand for skill-intensive output stemming from rising incomes, skill-biased technical change, and rising female labor supply all play important quantitative roles and together account for the majority of the growth of services. The extended model provides a direct link between female labor supply and the growth of service economy, which is shown to be important in the data.

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Paper provided by Society for Economic Dynamics in its series 2013 Meeting Papers with number 277.

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Date of creation: 2013
Handle: RePEc:red:sed013:277
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Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA

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  1. Mark Aguiar & Erik Hurst, 2007. "Measuring Trends in Leisure: The Allocation of Time Over Five Decades," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 969-1006.
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