Li Gan releases v2 of research paper on drivers of the rise of services
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Li Gan released an updated research paper that conducts input-output accounting on the drivers of the rise in the service sector, based on coordinated input-output tables for 76 economies from 1995 to 2022. The study finds that the share of traditional services cannot distinguish the driving types of tertiarization. It is negatively correlated with household orientation, and only about 40% of tertiarization events are dominated by household demand. Among the 65 economies where the service sector share increased from 1995 to 2018, 77% experienced a decline in household orientation, and 73% of the growth in the service sector share can be attributed to the production system channel.
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- arXiv q-finTwo Types of Tertiarization: Household Needs, Production Networks, and the Rise of Services
Using harmonized input-output tables for 76 economies from 1995 to 2022, the study finds that the share of traditional services cannot distinguish the driving type of tertiarization. It is negatively correlated with household orientation, and only about 40% of tertiarization episodes are dominated by household demand. Among the 65 economies that saw rising service shares from 1995 to 2018, 77% experienced declining household orientation, and 73% of the growth in service share can be attributed to the production system channel.
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