Local multipliers and the growth of services: evidence from late nineteenth century USA, Great Britain,and Sweden

Vinzent Ostermeyer

European Review of Economic History, 2023, vol. 27, issue 1, 70-90

Abstract: In the shadow of industry, the service sector substantially expanded during the late nineteenth century. This paper analyzes how the creation of industrial employment contributed to this growth of services. I leverage full-count census data from the United States, Great Britain, and Sweden to estimate local employment multipliers. I show that industrial growth was a key driver in the emergence of services. Each new industrial job created up to one additional local service job. This effect was driven by the high-skilled industrial sector where each additional job created up to two service jobs. Multiplier effects created jobs across different services.

Date: 2023
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