Article ID Journal Published Year Pages File Type
990115 Structural Change and Economic Dynamics 2006 21 Pages PDF
Abstract

This paper investigates empirically whether the growing service sector in China leads to cost disease, a likely consequence of tertiarization according to Baumol's unbalanced growth model. The investigation uses a panel data set of 30 provinces. The key findings are: the currently positive contribution of the service sector to growth is largely due to shifts of labour from the primary sector into services; however, signs of cost disease are discernible from weak responses to price signals in demand for services, in wage determination and labour input demand of the service sector.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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