Felice, G. (2003) Dinamica strutturale e occupazione nei servizi. UNSPECIFIED. (Unpublished)

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Abstract

This work analyses the relationships among the changes in the sectoral composition of an economic system and the aggregate dynamics of employment and output, with the specific aim to thoroughly understand the process of increasing service sector shares. Starting from Baumol’s (1967, 1985) and Pasinetti’s (1984) contributions, we point out a distinction between two types of structural dynamics, which come out from the interaction of sector specific technical progress and demand patterns. The first type is characterized by a relatively higher income elasticity and demand growth in the sectors with productivity growth above the average. The employment shares of these sectors expand. The second type is characterized by a relatively higher income elasticity and demand growth in the sectors with productivity growth below the average. This structural dynamics is likely to emerge if demand is not elastic to prices and the technical change is sector specific. Under these circumstances, the subset of aggregate outcomes which implies full employment growth is particularly restricted by the need for a specific appropriate balance between sectors with different rates of productivity growth. Changes in relative prices do not guarantee sectoral proportions consistent with a full employment growth path. The identification of the two dynamics is then carried out at the empirical level too, proposing an empirical evidence which is based on the top five industrialized countries (US, UK, Ger., Fr., Italy) in 22 sectors (including services) over the period 1965-1995. The analysis of the long run sectoral elasticities and the one of the cross-sectors correlations show evidence of the second type of structural dynamics.

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