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The Rise of Services: the Role of Skills, Scale, and Female Labor Supply

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  • Francisco J. Buera
  • Joseph P. Kaboski
  • Min Qiang Zhao

Abstract

This paper quantifies the roles of increases in the demand for skill-intensive output, the efficient scale of service production, and female labor supply in the growth of services. We extend the Buera and Kaboski (2012a,b) model to a two-person household, incorporating a joint decision on home and market production, and allow for skill and sectoral biased technology progress. The rising scale of services, the rising demand for skill-intensive output, and skill-biased technical change all play dominant roles. Furthermore, the extended model explains the majority of the increase in female labor supply, which also plays a role in services growth.

Suggested Citation

  • Francisco J. Buera & Joseph P. Kaboski & Min Qiang Zhao, 2013. "The Rise of Services: the Role of Skills, Scale, and Female Labor Supply," NBER Working Papers 19372, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:19372
    Note: DEV EFG LS
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    Cited by:

    1. Alexander Bick & Nicola Fuchs-Schündeln, 2018. "Taxation and Labour Supply of Married Couples across Countries: A Macroeconomic Analysis," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 85(3), pages 1543-1576.
    2. Doepke, M. & Tertilt, M., 2016. "Families in Macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 1789-1891, Elsevier.
    3. Morchio, Iacopo & Moser, Christian, 2018. "The Gender Pay Gap: Micro Sources and Macro Consequences," MPRA Paper 99276, University Library of Munich, Germany, revised 24 Mar 2020.
    4. Fabio Cerina & Alessio Moro & Michelle Rendall, 2021. "The Role Of Gender In Employment Polarization," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 62(4), pages 1655-1691, November.
    5. Timo Boppart & L. Rachel Ngai, 2021. "Rising inequality and trends in leisure," Journal of Economic Growth, Springer, vol. 26(2), pages 153-185, June.
    6. L. Rachel Ngai & Claudia Olivetti & Barbara Petrongolo, 2024. "Gendered change: 150 years of transformation in US hours," Economics Series Working Papers 1046, University of Oxford, Department of Economics.
    7. Bick, Alexander & Brüggemann, Bettina & Fuchs-Schündeln, Nicola & Paule-Paludkiewicz, Hannah, 2019. "Long-term changes in married couples' labor supply and taxes: Evidence from the US and Europe since the 1980s," Journal of International Economics, Elsevier, vol. 118(C), pages 44-62.
    8. Claudia Olivetti & Barbara Petrongolo, 2016. "The Evolution of Gender Gaps in Industrialized Countries," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 405-434, October.
    9. Doepke, Matthias & Hannusch, Anne & Kindermann, Fabian & Tertilt, Michèle, 2022. "The Economics of Fertility: A New Era," IZA Discussion Papers 15224, Institute of Labor Economics (IZA).
    10. L. Rachel Ngai & Barbara Petrongolo, 2017. "Gender Gaps and the Rise of the Service Economy," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(4), pages 1-44, October.
    11. Claudia Olivetti & Rachel Ngai, 2015. "Structural Transformation and the U-Shaped Female Labor Supply," 2015 Meeting Papers 1501, Society for Economic Dynamics.
    12. Bridgman, Benjamin, 2016. "Home productivity," Journal of Economic Dynamics and Control, Elsevier, vol. 71(C), pages 60-76.
    13. Andrés Álvarez & Camilo Gómez & Hernando Zuleta, 2019. "Bequests, Imperfections in Factor Markets, and Long-Run Inequality: A Theoretical Assessment of Piketty," Documentos CEDE 17674, Universidad de los Andes, Facultad de Economía, CEDE.
    14. So Kubota, 2020. "Culture, Gender, and Structural Transformation: The Case of Turkey," Working Papers 1925, Waseda University, Faculty of Political Science and Economics.
    15. Claudia Olivetti & Barbara Petrongolo, 2016. "The Evolution of Gender Gaps in Industrialized Countries," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 405-434, October.
    16. Roberto Roson & Dominique van der Mensbrugghe, 2017. "Assessing Long Run Structural Change in Multi-Sector General Equilibrium Models," EcoMod2017 10257, EcoMod.
    17. Todd Schoellman & Bart Hobijn, 2017. "Structural Transformation by Cohort," 2017 Meeting Papers 1417, Society for Economic Dynamics.
    18. Michael Bar & Moshe Hazan & Oksana Leukhina & David Weiss & Hosny Zoabi, 2018. "Why did rich families increase their fertility? Inequality and marketization of child care," Journal of Economic Growth, Springer, vol. 23(4), pages 427-463, December.
    19. Michelle Rendall, 2018. "Female Market Work, Tax Regimes, and the Rise of the Service Sector," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 28, pages 269-289, April.
    20. Murat Üngör & M. Koray Kalafatcılar, 2014. "Productivity, Demographics, and Growth in Turkey: 2004-12," Ekonomi-tek - International Economics Journal, Turkish Economic Association, vol. 3(1), pages 23-56, January.
    21. Pierre‐Richard Agénor & Kamer K. Ozdemir & Emmanuel Pinto Moreira, 2021. "Gender Gaps in the Labour Market and Economic Growth," Economica, London School of Economics and Political Science, vol. 88(350), pages 235-270, April.
    22. Roberto Roson & Dominique van der Mensbrugghe, 2017. "Demand-Driven Structural Change in Applied General Equilibrium Models," IEFE Working Papers 96, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    23. Morchio, Iacopo & Moser, Christian, 2018. "The Gender Pay Gap: Micro Sources and Macro Consequences," MPRA Paper 99276, University Library of Munich, Germany, revised 24 Mar 2020.
    24. Lee, Jongkwan & Shim, Myungkyu & Yang, Hee-Seung, 2022. "The rise of low-skill service employment: The role of dual-earner households," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 255-273.

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    More about this item

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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