The Productivity Paradox: Evidence from Indirect Indicators of Service Sector Productivity Growth

Whereas difficulties in measuring the output of service sectors have been well documented, input measures are reasonably accurate. Using U.S. input-output data for the period 1958-87 and a number of indices of skill and occupational change derived from the Dictionary of Occupational Titles and decennial census data covering the period 1960-1990, I find strong evidenec that among all industries in the economy industry productivity growth is positively related to R&D intensity and knowledge spillovers from other industries but negatively related to major restructuring of technology.