Services and Employment: Explaining the U.S.-European Gap

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Pauline Chan Fellow and Tutor in Economics at St Hilda's College and University (Cuf) Lecturer Mary Gregory, Mary Gregory, Weimer Salverda, Ronald Schettkat
Princeton University Press, Jul 22, 2007 - Business & Economics - 251 pages

Why is Europe's employment rate almost 10 percent lower than that of the United States? This "jobs gap" has typically been blamed on the rigidity of European labor markets. But in Services and Employment, an international group of leading labor economists suggests quite a different explanation. Drawing on the findings of a two-year research project that examined data from France, Germany, the Netherlands, the United Kingdom, and the United States, these economists argue that Europe's 25 million "missing" jobs can be attributed almost entirely to its relative lack of service jobs. The jobs gap is actually a services gap. But, Services and Employment asks, why does the United States consume services at such a greater rate than Europe?



Services and Employment is the first systematic and comprehensive international comparison on the subject. Mary Gregory, Wiemer Salverda, Ronald Schettkat, and their fellow contributors consider the possible role played by differences in how certain services--particularly health care and education--are provided in Europe and the United States. They examine arguments that Americans consume more services because of their higher incomes and that American households outsource more domestic work. The contributors also ask whether differences between U.S. and European service sectors encapsulate fundamental trans-Atlantic differences in lifestyle choices.


In addition to the editors, the contributors include Victor Fuchs, William Baumol, Giovanni Russo, Adriaan Kalwij, Stephen Machin, Andrew Glyn, Joachin Möller, John Schmitt, Michel Sollogoub, Robert Gordon, and Richard Freeman.

 

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Contents

The USEuropean Gap in Service Employment and Demand The Research Agenda
15
Reflections on the Rise of Service Sector Employment
42
On Mechanisms Underlying the Growing Share of Service Employment in the Industrialized Economies
63
Do Demand Differences Cause the USEuropean Employment Gap?
81
Comparative Service Consumption in Six Countries
109
Employment Differences in Distribution Wages Productivity and Demand
141
Why Was Europe Left at the Station When Americas Productivity Locomotive Departed?
176
Can Marketization of Household Production Explain the Jobs Gap Puzzle?
198
Service Included? Services and the USEuropean Employment Gap
217
Bibliography
231
List of DEMPATEM Working Papers
241
Index
243
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Page ix - Director of the Labor Studies Program at the National Bureau of Economic Research. He is also Senior Research Fellow in Labour Markets at the Centre for Economic Performance at the London School of Economics.

About the author (2007)

Mary Gregory is Deputy Head of the Department of Economics, Fellow, and Tutor at St Hilda's College, University of Oxford. Wiemer Salverda is Director of the Amsterdam Institute for Advanced Labor Studies at the University of Amsterdam. Ronald Schettkat is Professor of Economics at the University of Wuppertal in Germany. All three have published widely on labor economics.

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