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Sectoral explanations of employment in Europe: the role of services

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  • Ward-Warmedinger, Melanie
  • D'Agostino, Antonello
  • Serafini, Roberta

Abstract

This paper investigates the determinants of the service sector employment share in the EU-15, for the aggregate service sector, four sub-sectors and twelve service sector branches. Recently, both Europe and the US have experienced an increase in the share of service-related jobs in total employment. Although converging in all European countries, a significant gap in the growth of service jobs in Europe relative to the US persists. Understanding the main factors behind this gap is key to achieving higher employment levels in Europe. This paper focuses on the role of barriers in the EU-15 which may have hindered its ability to absorb labour supply and therefore to adjust efficiently to the sectoral reallocation of labour. We find that a crucial role in this process has been played by the institutional framework affecting the setting up of new businesses and by the mismatch between workers' skills and job vacancies. JEL Classification: E24, J21, J23, J24, L80

Suggested Citation

  • Ward-Warmedinger, Melanie & D'Agostino, Antonello & Serafini, Roberta, 2006. "Sectoral explanations of employment in Europe: the role of services," Working Paper Series 625, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:2006625
    Note: 171133
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    File URL: https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp625.pdf
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    Citations

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    Cited by:

    1. Muhammad AJMAIR & Khadim HUSSAIN & Sabahat AKRAM & Ambreen ZEB, 2017. "What determines the growth of services sector in Pakistan? A comparison of ARDL bound testing and time varying parametric estimation with general to specific approach," Turkish Economic Review, KSP Journals, vol. 4(3), pages 308-319, September.
    2. Safarov, Bakhtier, 2011. "Challenges and development guidelines of the service industry in Uzbekistan," Perspectives of Innovations, Economics and Business (PIEB), Prague Development Center (PRADEC), vol. 7(1), pages 1-2, January.
    3. Metka Stare & Andreja Jaklič, 2011. "Towards Explaining Growth of Private and Public services in the Emerging Market Economies," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 13(30), pages 581-598, June.
    4. repec:zbw:rwirep:0005 is not listed on IDEAS
    5. Bachmann Ronald & Burda Michael C., 2010. "Sectoral Transformation, Turbulence and Labor Market Dynamics in Germany," German Economic Review, De Gruyter, vol. 11(1), pages 37-59, February.
    6. Per Skedinger, 2010. "Employment Protection Legislation," Books, Edward Elgar Publishing, number 13686.
    7. Ad van Riet & Moreno Roma, 2006. "Competition, productivity and prices in the euro area services sector," Occasional Paper Series 44, European Central Bank.
    8. Luigi Bonatti & Giulia Felice, 2010. "Trade And Growth In A Two‐Country Model With Home Production And Uneven Technological Spillovers," Manchester School, University of Manchester, vol. 78(5), pages 484-509, September.
    9. Gisela Di Meglio & Metka Stare & Andreja Jaklič, 2011. "Explanation for public and private service growth in the enlarged EU," The Service Industries Journal, Taylor & Francis Journals, vol. 32(4), pages 503-514, June.
    10. Luigi BONATTI & Giulia FELICE, 2009. "Trade and growth in a two-country model with home production and uneven technological spillovers," Departmental Working Papers 2009-13, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    11. DonHee Lee & Dong Lee, 2013. "A comparative study of quality awards: evolving criteria and research," Service Business, Springer;Pan-Pacific Business Association, vol. 7(3), pages 347-362, September.
    12. Martina Halaskova & Renata Halaskova & Viktor Prokop, 2018. "Evaluation of Efficiency in Selected Areas of Public Services in European Union Countries," Sustainability, MDPI, vol. 10(12), pages 1-17, December.
    13. Luigi Bonatti, 2007. "Home production, labor taxation and trade account," Department of Economics Working Papers 0715, Department of Economics, University of Trento, Italia.
    14. Ronald Bachmann & Michael C. Burda, 2007. "Sectoral Transformation, Turbulence, and Labor Market Dynamics in Germany," Ruhr Economic Papers 0005, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    15. Catherine Lam & Frank Walter & Kan Ouyang, 2014. "Display rule perceptions and job performance in a Chinese retail firm: The moderating role of employees’ affect at work," Asia Pacific Journal of Management, Springer, vol. 31(2), pages 575-597, June.
    16. Andreas Bergh, 2014. "Sweden and the Revival of the Capitalist Welfare State," Books, Edward Elgar Publishing, number 15717.
    17. Bakhtier Safarov, 2011. "Challenges And Development Guidelines Of The Service Industry In Uzbekistan," Perspectives of Innovation in Economics and Business (PIEB), Prague Development Center, vol. 7(1), pages 43-44, January.
    18. Ambreen ZEB & Khadim HUSSAIN & Usman AHMAD & Muhammad AJMAIR, 2017. "Factors affecting the services sector growth in Pakistan: A time varying parametric approach," Journal of Economics Library, KSP Journals, vol. 4(3), pages 388-395, September.
    19. Mensah, Emmanuel & Owusu, Solomon & Foster-McGregor, Neil & Szirmai, Adam, 2018. "Structural change, productivity growth and labour market turbulence in Africa," MERIT Working Papers 2018-025, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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    More about this item

    Keywords

    employment share; Europe; institutions in the labour and product market; sectoral adjustment; services; US;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L80 - Industrial Organization - - Industry Studies: Services - - - General

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