Economic growth is driven by structural change. Structural change does not come without a cost, the most evident social cost being high and persistent unemployment. This paper develops an economy with an endogenously expanding service sector, where the constant flow of workers in and out of...

The growth patterns of service sectors across France, Germany, and the US exhibit striking differences. This can explain most of the well-known differences in aggregate growth rates of labour productivity and employment across these countries. Having confirmed this observation by a shift-share...

The positive association between the service sector share of output and per capita income is one of the best-known regularities in all of growth and development economics. Yet there is less than complete agreement on the nature of that association. Here we identify two waves of service sector...