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Structural change and the growth contribution of services: how motion pictures industrialized US spectator entertainment

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  • Bakker, Gerben

Abstract

This paper examines the effect of a new technology on a labour-intensive service. Comparing primal and dual TFP-growth with final-year social savings, we find that, between 1900 and 1938, motion pictures increased entertainment output (measured in spectator-hours) by at least nine percent annually, mainly through intensive growth. Falling profit margins indicate that motion pictures increased competition, while real wages rising twice the national average suggests labour captured part of the efficiency gains. Surviving live entertainment experienced some intensive growth, reached a similar capital/labour ratio but paid lower wages. These findings suggest that some services can experience similar productivity gains as manufacturing and that traditional service-activities survive the onslaught of new technologies by transforming their production structure.

Suggested Citation

  • Bakker, Gerben, 2007. "Structural change and the growth contribution of services: how motion pictures industrialized US spectator entertainment," Economic History Working Papers 22314, London School of Economics and Political Science, Department of Economic History.
    • Handle: RePEc:ehl:wpaper:22314
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    References listed on IDEAS

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    Cited by:

    1. Gerben Bakker, 2011. "Leisure Time, Cinema and the Structure of Household Entertainment Expenditure, 1890–1940," Chapters, in: Samuel Cameron (ed.), Handbook on the Economics of Leisure, chapter 16, Edward Elgar Publishing.

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    More about this item

    JEL classification:

    • N0 - Economic History - - General
    • B1 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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