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Title: The Rise in Services and Outsourcing
Citation Type: Miscellaneous
Publication Year: 2012
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Abstract: This paper investigates the impact of outsourcing on sectoral reallocation in the U.S.,which, over the period 1948-2007, mainly coincides with the remarkable rise in services. The service sector accounts today for more than 83% of total employment, while the same share was 60% in 1947. Roughly 40% of this growth comes from a single industry within services, namely Professional and Business Services. This is a peculiar sector, given that more than 90% of its output is used by other firms as an intermediate input or investment; and it is where most of the service outsourcing activity is concentrated. The same evidence appears in the structure of the Input-Output tables, the rise of the share of Professional and Business Services is in fact the main change that has taken place over the past 60 years. Using a simple accounting framework, which is capable of capturing the fully-fledged input-output structure of the economy, I calculate the contribution of outsourcing to the reallocation of employment across sectors. I find that Professional and Business Services outsourcing alone accounts for 14% of the total increase in the share of services in total employment.
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Authors: Berlingieri, Giuseppe
Publisher: London School of Economics
Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure
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