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No significant service gap between west Germany and the USA

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Economic Bulletin

Conclusions

The analyses show that a significant “services gap” does not exist between west Germany and the USA. Such a gap is not even evident in the area of low-skill service activities, such as in catering, once the marginal employment relations — the importance of which is understated by the official statistics — are included.

This finding invalidates the empirical basis for economic policy proposals for an expansion of employment in service branches as a way out of the employment crisis. It is evident that a solution to Germany's current employment problems can only be found in a strategy that increases the scope for employment at the macro-economic level, i.e. irrespective of sectoral developments and whatever the implications of this for the distribution of the various types of activity. Having said this, the heavy bias in the output structure of the German economy in favour of industrial output suggests that an additional employment potential does exist in services, especially personal services.

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References

  1. The CPS with its labour market related questions is a repeated survey sample with a labour market focus. On the database analysed here cf. the Preface by Daniel Feenberg, NBER, CPS Labour Extracts, CD-ROM, 2nd Edition 1979 – 1993, Cambridge 1994.

  2. Cf. Gustav A. Horn, Strong Growth and a High Employment Level in the USA, in: Economic Bulletin, Vol. 33, no. 3, March 1996.

  3. Micro and Macroeconomic Adjustment Processes in East Germany -Thirteenth Report, in: Economic Bulletin, vol. 32, no. 9, May 1995, p. 6.

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Haisken-DeNew, J., Horn, G.A., Schupp, J. et al. No significant service gap between west Germany and the USA. Economic Bulletin 33, 3–8 (1996). https://doi.org/10.1007/BF02300662

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  • DOI: https://doi.org/10.1007/BF02300662

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