Economic Performance in the Americas

Economic Performance in the Americas

The Role of the Service Sector in Brazil, Mexico and the USA

Nanno Mulder

Economic Performance in the Americas compares the economic performances of Brazil, Mexico and the USA over the past half century. As with most other high and middle-income countries their economies are service-sector orientated and have been for several decades. This book encompasses all sectors of the economy but focuses primarily on services, analysing both the main trends in the various service industries in Brazil and Mexico and the underlying forces shaping their huge expansion.

Chapter 2: Structural Change and the Shift to Services

Nanno Mulder

Subjects: economics and finance, industrial economics

Extract

INTRODUCTION In the twentieth century Brazil, Mexico and the USA experienced a large transformation of the sectoral composition of their economies, as illustrated by the composition of employment and GDP (see Tables 2.1 and 2.2). The service shares increased, whereas those of the primary sector fell. In the USA this process was already well under way at the beginning of this century, whereas in Brazil and Mexico these shifts only started in the 1930s. Between 1950 and 1996 the share of services in employment doubled fiom one quarter to almost 60 per cent in the two Latin American countries and increased fi-om 57 to 79 per cent in the USA. In the same period the share of the primary sector in employment fell fiom approximately 60 to less than 25 per cent in Brazil and Mexico, compared to a drop fkom 12 to 3 per cent in the USA. Trends in the employment shares of the secondary sector moved in the opposite direction over the post-war period: they increased by 6 and 9 percentage points, respectively, in Brazil and Mexico, while the share fell fiom 30 to 19 per cent in the USA. In the first half of twentieth century, the service sector represented a much higher share of nominal GDP than of employment in all three countries. AAer 1950, its share hrther increased. However, due to the lower rate of labour productivity growth in services compared to the rest of the economy, the growth of the service sector share...

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