High-Skilled Services and Development in China

35 Pages Posted: 6 Dec 2019

See all articles by Lei Fang

Lei Fang

Federal Reserve Bank of Atlanta

Berthold Herrendorf

Arizona State University (ASU) - Economics Department

Date Written: 2019-11-01

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: mortgage default, foreclosure, externality, policy, vacancy

JEL Classification: O41, O47, O51

Suggested Citation

Fang, Lei and Herrendorf, Berthold, High-Skilled Services and Development in China (2019-11-01). FRB Atlanta Working Paper No. 2019-21. Available at SSRN: https://ssrn.com/abstract=3498726 or http://dx.doi.org/10.29338/wp2019-21

Lei Fang (Contact Author)

Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States
404-498-8057 (Phone)

Berthold Herrendorf

Arizona State University (ASU) - Economics Department ( email )

Tempe, AZ 85287-3806
United States

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