Service Sector Growth in Rich Democracies

• In Event: 393 - Section on Sociology of Development Roundtables (one-hour)
  In Refereed Roundtable: Table 04. Markets and Institutions

Abstract

Over the last four decades, services have become the largest sector in the economies of rich democracies. Existing theorization on service sector growth attributes this change to growing societal affluence, changing consumer tastes, and differential productivity. However, the period in which the service sector has grown has been characterized by stagnation and recurrent crises. I argue that stagnation, rather than growing affluence, allowed the service sector to thrive as growing inequality increased demand for consumer services while an expanded reserve army provided low-wage workers. I test these arguments using a panel dataset of 14 more-developed countries over the period 1970-2010.

Author

• Daniel Thompson, Johns Hopkins University