The shift to services employment: A review of the literature

This paper provides an overview of literature on the employment shift towards services. It follows the three dimensions of structural change: inter-industry productivity differences, the inter-industry division of labor (outsourcing), and shifts in final demand. It concludes that the third dimension gained importance over the last decades although differential productivity growth continued to contribute to the rise of service employment as well. Outsourcing of service tasks from manufacturing industries increased but cannot explain much of the rise in service-industry employment over time. The shift to services is not just a price effect nor is it mainly the effect of the outsourcing of service activities from manufacturing industries. The shift to services is real.