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The Shift to Services: A Review of the Literature

Author

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  • Schettkat, Ronald

    (University of Wuppertal)

  • Yocarini, Lara

    (Utrecht University)

Abstract

The present paper provides an overview of literature on the shift to services. It follows the three dimensions of structural change - final demand, the inter-industry division of labor and inter-industry productivity differences. It first looks at the ‘classics’, however (Fisher (1935), Clark (1940), Fourastié (1949), Baumol (1967, 2001), and Fuchs (1968)). Next, it treats studies analyzing differences in service-industry employment, and offers a discussion of studies focussing on final demand as an explanation of higher service shares in GDP. It also provides an overview of studies analyzing the inter-industry division of labor on the basis of input-output data. Finally, it discusses studies following Baumol’s cost-disease hypothesis.

Suggested Citation

  • Schettkat, Ronald & Yocarini, Lara, 2003. "The Shift to Services: A Review of the Literature," IZA Discussion Papers 964, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp964
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    References listed on IDEAS

    as
    1. Baumol, William J, 1972. "Macroeconomics of Unbalanced Growth: Reply," American Economic Review, American Economic Association, vol. 62(1), pages 150-150, March.
    2. Richard Freeman & Ronald Schettkat, 2002. "Marketization of Production and the US-Europe Employment Gap," CEP Discussion Papers dp0559, Centre for Economic Performance, LSE.
    3. Katouzian, M A, 1970. "The Development of the Service Sector: A New Approach," Oxford Economic Papers, Oxford University Press, vol. 22(3), pages 362-382, November.
    4. Tom Elfring, 1989. "New Evidence On The Expansion Of Service Employment In Advanced Economies," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 35(4), pages 409-440, December.
    5. Michael J. Boskin, 1998. "Consumer Prices, the Consumer Price Index, and the Cost of Living," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 3-26, Winter.
    6. Zvi Griliches, 1992. "Output Measurement in the Service Sectors," NBER Books, National Bureau of Economic Research, Inc, number gril92-1, June.
    7. Victor R. Fuchs, 1968. "The Service Economy," NBER Books, National Bureau of Economic Research, Inc, number fuch68-1, June.
    8. Eileen Appelbaum & Ronald Schettkat, 1999. "Are Prices Unimportant? The Changing Structure of the Industrialized Economies," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 21(3), pages 387-398, March.
    9. repec:bla:revinw:v:35:y:1989:i:4:p:409-40 is not listed on IDEAS
    10. Robert Rowthorn & Ramana Ramaswamy, 1999. "Growth, Trade, and Deindustrialization," IMF Staff Papers, Palgrave Macmillan, vol. 46(1), pages 1-2.
    11. Thijs ten Raa & Ronald Schettkat (ed.), 2001. "The Growth of Service Industries," Books, Edward Elgar Publishing, number 2137.
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    Citations

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    Cited by:

    1. Sieglen, Georg & Pohl, Carsten & Carl, Birgit, 2011. "Die Entwicklung des Arbeitsmarktes in Nordrhein-Westfalen : eine Analyse auf regionaler Ebene," IAB-Regional. Berichte und Analysen aus dem Regionalen Forschungsnetz. IAB Nordrhein-Westfalen 201104, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Barrett, Alan & Kearney, Ide & McCarthy, Yvonne, 2006. "Quarterly Economic Commentary, Summer 2006," Forecasting Report, Economic and Social Research Institute (ESRI), number QEC20062, march.
    3. Kox, Henk L.M. & Rubalcaba, Luis, 2007. "Business services and the changing structure of European economic growth," MPRA Paper 3750, University Library of Munich, Germany.
    4. Jaime Bonet, 2007. "La terciarización de las estructuras económicas regionales en Colombia," Revista de Economía del Rosario, Universidad del Rosario, May.
    5. Francesca Mameli & Simona Iammarino & Ron Boschma, 2012. "Regional variety and employment growth in Italian labour market areas: services versus manufacturing industries," Papers in Evolutionary Economic Geography (PEEG) 1203, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Feb 2012.
    6. Magoti, Edwin & Mtui, John M., 2020. "The Relationship between Economic Growth and Service Sector in Tanzania: An Empirical Investigation," African Journal of Economic Review, African Journal of Economic Review, vol. 8(2), July.
    7. Rafael Camargo de Pauli & Luciano Nakabashi & Armando Vaz Sampaio, 2010. "Fatores de Oferta e Demanda na Qualificação dos Trabalhadores Brasileiros," Working Papers 0100, Universidade Federal do Paraná, Department of Economics.
    8. 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.
    9. Cirer-Costa, Joan Carles, 2019. "Spain's tourism models in the first third of the twentieth century," MPRA Paper 91824, University Library of Munich, Germany.
    10. Sandy Dall’erba & Marco Percoco & Gianfranco Piras, 2009. "Service industry and cumulative growth in the regions of Europe," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 21(4), pages 333-349, July.
    11. Surajit Mazumdar, 2010. "Industry and Services in Growth and Structural Change in India: Some Unexplored Features," Working Papers 1002, Institute for Studies in Industrial Development (ISID).
    12. 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.
    13. Andreas Breitenfellner & Antje Hildebrandt, 2006. "High Employment with Low Productivity? The Service Sector as a Determinant of Economic Development," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 110-135.
    14. Rachwał Tomasz, 2011. "Transformations of the Employment Structure as an Expression of the Transformation of Polish Industry Against the Background of the European Union," Bulletin of Geography. Socio-economic Series, Sciendo, vol. 15(15), pages 5-25, January.
    15. Vélez Tamayo, Julián Mauricio, 2013. "Medellín: Una ciudad hacia el sector servicios y los efectos en el empleo [Medellin: a city to service sector and the employment effects]," MPRA Paper 58742, University Library of Munich, Germany.
    16. Erich Langmantel, 2004. "Der Beitrag von Industrie und Dienstleistungen zum regionalen Wirtschaftswachstum in Bayern," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 57(15), pages 08-13, August.
    17. Muhammad Salam & Javed Iqbal & Anwar Hussain & Hamid Iqbal, 2018. "The Determinants of Services Sector Growth: A Comparative Analysis of Selected Developed and Developing Economies," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 57(1), pages 27-44.
    18. Maria Savona & André Lorentz, 2005. "Demand and Technology Determinants of Structural Change and Tertiarisation: An Input-Output Structural Decomposition Analysis for four OECD Countries," LEM Papers Series 2005/25, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    19. Esther Gordo & Javier Jareño & Alberto Urtasun, 2006. "Radiografía del sector servicios en España," Occasional Papers 0607, Banco de España.
    20. Klodt, Henning, 2004. "Strukturwandel und Arbeitsmarktprobleme in Deutschland," Open Access Publications from Kiel Institute for the World Economy 3372, Kiel Institute for the World Economy (IfW Kiel).
    21. Stanislaw Cichocki, 2012. "Self-employment and the business cycle: evidence from Poland," Post-Communist Economies, Taylor & Francis Journals, vol. 24(2), pages 219-239, January.
    22. Daniel Lind, 2011. "The Myths and Reality of Deindustrialization in Sweden: The Role of Productivity," International Productivity Monitor, Centre for the Study of Living Standards, vol. 22, pages 29-43, Fall.
    23. Piecuch, Jakub & Paluch, Łukasz, 2016. "Importance Of Agriculture Within The Structure Of Employment And Production In The Mediterranean Countries," Journal of Agribusiness and Rural Development, University of Life Sciences, Poznan, Poland, vol. 39(1).

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    More about this item

    Keywords

    economic development; service industries; structural economic change; productivity; employment;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • L0 - Industrial Organization - - General
    • L8 - Industrial Organization - - Industry Studies: Services
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations

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