Working Paper

High-Skilled Services and Development in China


Abstract: We document that the employment share of high-skill-intensive services is much lower in China than in countries with similar gross domestic product (GDP) per capita. We build a model of structural change with goods and low- and high-skill-intensive services to account for this observation. We find that large distortions limit the size of high-skill-intensive services in China. If they were removed, both high-skill-intensive services and GDP per capita would increase considerably. We document a strong presence of state-owned enterprises in high-skill-intensive services and argue that this presence leads to important distortions.

Keywords: policy; foreclosure; vacancy; mortgage default; externality;

JEL Classification: O47; O41; O51;

https://doi.org/10.29338/wp2019-21

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Bibliographic Information

Provider: Federal Reserve Bank of Atlanta

Part of Series: FRB Atlanta Working Paper

Publication Date: 2019-11-01

Number: 2019-21

Pages: 35 pages