The Unassuming Economist

Source: VoxEU CEPR

“The servicification of economic activity occurring across Africa has implications for the continent’s future. Using per capita nightlight luminosity as a proxy for economic development, this column finds a strong positive association between higher-skill services and economic growth that varies according to geography, institutions, technology, and market conditions. Data on the structure of employment in African economies reveal significant shifts in the composition of employment towards services across and within countries, and towards growth in service-related occupations across all sectors of the economy.”

The authors present new data on the composition of jobs in the services sector at the sub-national level in a sample of 13 African countries, describe how this has changed over time, and explain how employment in services correlates with indicators of economic development commonly used in the literature. Throughout their sample, they find that the share of agriculture in total employment declined through the decades but was offset by an equivalent increase in the share of services. They go on to dig deeper into aspects like characteristics of service sector employees and differing capacities of different services in supporting workers’ productivity.

Source: VoxEU CEPR

“The role of global value chains for development is often told from a manufacturing or agriculture perspective. This column discusses how the rise of global services value chains offers developing countries with new opportunities by providing jobs, revenue, and productivity growth. In addition, they do so in a more inclusive way than manufacturing. Policymakers need to invest in human capital and address regulatory barriers to services trade to make the most of this development.”

It draws examples of the Indian software services industry and business process outsourcing services in Philippines to expand on the idea of countries joining service GVCs. They find insights about themes like spillover benefits from trade in services and evidence about the relationship between trade and employment in the sector.

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