Economic Growth and the Rise of Service Employment

Victor Fuchs

No 486, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The distribution of employment among Agriculture, Industry, and Service within countries is closely related to the level of real Gross Domestic Product per capita. As real income rises, Agriculture's share falls, Service employment rises, and Industry’s share rises to a peak at about $3,300 (1970 dollars) per capita and then declines. U.S. time series and OECD cross-sections follow almost identical patterns of employment change. The decline of Agriculture is attributable primarily to differences in income elasticity of demand but the shift from Industry to Service is attributable primarily to differential rates of growth of output per worker. Economic growth also contributes to the rise of service employment through an increase in female labor force participation because families with working wives tend to spend a higher proportion of their income on services. Productivity tends to grow less rapidly in the Service sector than in the rest of the economy, but the shift of employment to Services was not a major factor in the slowing of aggregate productivity in the United States in the 1970's.

Date: 1980-06
Note: LS
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

Published as Fuchs, Victor R. "Economic Growth and the Rise of Service Employment." Towards an Explanation of Economic Growth, edited by Herbert Giersch, pp. 221-2 52. Tubingen, West Germany: J.C.B. Mohr (Paul Siebeck), 1981.

Downloads: (external link)
http://www.nber.org/papers/w0486.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:0486

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w0486

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().