The Rise of the Service Economy

Francisco Buera and Joseph Kaboski

American Economic Review, 2012, vol. 102, issue 6, 2540-69

Abstract: This paper analyzes the role of specialized high-skilled labor in the disproportionate growth of the service sector. Empirically, the importance of skill-intensive services has risen during a period of increasing relative wages and quantities of high-skilled labor. We develop a theory in which demand shifts toward more skill- intensive output as productivity rises, increasing the importance of market services relative to home production. Consistent with the data, the theory predicts a rising level of skill, skill premium, and relative price of services that is linked to this skill premium. (JEL J24, L80, L90)

Date: 2012
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Citations: View citations in EconPapers (232)

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Working Paper: The Rise of the Service Economy (2009)
Working Paper: The Rise of the Service Economy (2006)
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