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Title: | Structural transformation in India: The Role of the Service Sector |
Author: | Serrano Quintero, Rafael |
Keywords: | Productivitat laboral Recursos humans Competències professionals Índia Labor productivity Capital humain Vocational qualifications India |
Issue Date: | 2023 |
Series/Report no: | [WP E-Eco23/451] |
Abstract: | Contrary to the experience of industrialized countries, productivity growth of Indian services has been consistently faster than manufacturing. In this paper, I document that (i) the fastest growing industries in services grow faster than in manufacturing; (ii) faster productivity growth in services than in manufacturing is not because of sluggish manufacturing productivity; (iii) the supply of skilled workers in India is skewed towards tertiary education and (iv) the service sector is the most skill intensive; (v) returns to schooling are larger for the high-productivity services. To quantify and rationalize these facts, I construct a multi-sector model of estructural change with high and low-skilled workers. The calibrated model suggests that the large supply of high-skill workers combined with higher skill intensity in the service sector seem to be behind the services take-off. The data imply that service sub-sectors are gross substitutes while manufacturing sub-sectors are gross complements. This will accelerate productivity growth in services and decelerate productivity growth in manufacturing. |
It is part of: | UB Economics – Working Papers, 2023, E23/451 |
URI: | http://hdl.handle.net/2445/202190 |
Appears in Collections: | UB Economics – Working Papers [ERE] |
Files in This Item:
File | Description | Size | Format | |
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E23-451_Serrano.pdf | 1.03 MB | Adobe PDF | View/Open |
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