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Services’ Economic and Social Effects in a Globalized World

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Universitat de Barcelona. Facultat d'Economia i Empresa

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[eng] In the last decades, services sector has emerged as the most important driving force of the economy supporting a growing share to gross domestic product (GDP) trade and employment. The purpose of this thesis is to analyse the role of this dominating sector and better understand its economic and social effects in different regions of the world taking into account the globally interconnected structure of the economy. To do so, it employs input-output models and tables that allow analyse the interrelation of industries and economies and thus to study the globalized economy. After the introduction of Chapter 1, Chapter 2 focuses exclusively on the economic impact of services. It investigates the contribution of services trade to the variation of global income generation for the period of 2000 to 2014, applying a structural decomposition analysis (SDA) in a global multi-regional input-output framework. Empirical findings suggest that overall, intermediate trade of services contributed to 5.38% of global income generation while final trade of services to 4.56% for the 15 years-period analysed. This significant contribution seems to be explained mainly through the increase of demand of services as the negative effect of the structure of trade suggests that per unit of services traded, the value–added generated decreased over this period. At sectoral level, wholesale trade, the financial sector, administrative and support services, legal and accounting services along with land transport appear to be the most important contributors of the services sectors through trade. When looking at the share of contribution of services trade of different groups relative to only their own total contribution, the eastern European countries is the group that makes it to the top, despite having northern European countries along with the BRIIC countries (Brazil, Russia, India and China) and the northern American ones as the most important contributors through services trade. Chapter 3 of the thesis targets both the economic and social effects of services by analysing the global distribution of the generated income between capital and labour in the services sectors to better understand the growing decline of the labour share in favour of the capital, increasing income inequality. This is done first by analysing the evolution of the distribution of generated income through the years and by decomposing the global value-added to study the different effects that lead the progress of the income inequality. The study found that while labour compensation in the services sector saw the highest increase, the share of labour relative to capital decreased by 2 percentage points, favouring capital accumulation; however, services retained the highest labour share compared to other sectors, even in 2014. The SDA reveals that while wages have increased due to higher production, productivity gains —allowing firms to produce more with fewer workers— have significantly reduced labour costs, especially in manufacturing and services. This trend is driven by technological advancements and globalization, enabling cost reductions through efficient production and cheaper labour abroad. Public sector services experienced the highest labour costs due to government budget cuts favouring private sector growth. Regionally, wage increases were prominent in developed countries, while labour cost reductions were strongest outside southern Europe, where service workers benefited more from wage growth. Capital cost reductions, tied to technological advances, further decreased labour shares, especially in advanced economies like the United States of America (USA), Canada, and Japan, where services contributed significantly to these declines. Despite services generating the most wealth and distributing a substantial share to labour, this share has declined, raising concerns about growing income inequality and the social consequences of liberal policies, globalization, and technological progress. Before the conclusions, the last chapter of the thesis —Chapter 4— centres its attention on social consequences of globalisation and services by studying the effect of economic growth components to gender payment gap (GPG) accounting for different socio-economic characteristics as age and education. The analysis focuses on 13 main economies of the European Union (EU) from 1995 to 2018, paying a particular attention to the services sectors. To do so, work has been done on the data construction to combine two releases of EU-KLEMS dataset containing wage and employment share information on gender by characteristics with OECD-STAN dataset that offers overall values of wage and employment needed. Findings indicate a 35% reduction in the GPG in the EU from 1995 to 2018, equivalent to a decrease of 21.29 percentage points (pp), driven primarily by structural changes and wage distribution variations across industries, which accounted for 54% of the total reduction. Direct discrimination contributed to 44% of the reduction, while feminization had a minimal impact, reducing the GPG by only 0.27 pp, with a negative effect until 2007. Services sectors, particularly public industries such as health and social services, saw the largest GPG reductions (28.65 pp), benefiting young and senior high-skilled workers the most through reductions in discrimination, while medium-skilled senior workers gained from structural changes. Conversely, low-skilled workers and those aged 30-49 experienced the smallest reductions, likely due to limited bargaining power and job flexibility. Countries like the Slovak Republic, Spain, and Belgium achieved the most significant reductions, while Hungary, Italy, and Poland lagged, especially among low-skilled workers. Overall, the rise of the service sector and its restructuring has benefited female workers by reducing pay disparities, particularly in public sector roles, which have been more proactive in promoting equal pay compared to private sector firms. Overall, this thesis underscores the pivotal role of services in the globalized economy, driving economic development through rising demand and international trade, though globalization and technological progress have reduced labour costs and worker compensation, particularly in advanced economies and public industries. While services have achieved significant reductions in gender pay disparities, public sectors stand out for their positive contributions to gender equality despite an observed reduced distribution of income towards workers. This thesis has contributed to understanding the economic and social roles of services in a globalized economy, though further research is needed to explore income inequality, socio-economic group impacts, and other forms of gender discrimination under globalization.

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[cat] El sector serveis ha emergit en les darreres dècades com la força motriu més important de l'economia, contribuint a una proporció creixent del producte interior brut (PIB), del comerç i de l'ocupació. L'objectiu d'aquesta tesi és analitzar el paper d'aquest sector dominant i comprendre millor els seus efectes econòmics i socials en diferents regions del món i a escala global, tenint en compte l'estructura interconnectada de l'economia. Per fer-ho, s'utilitzen models i taules input-output que permeten analitzar la interrelació entre indústries i economies, i així estudiar l'economia globalitzada. El capítol 2 se centra exclusivament en l'impacte econòmic dels serveis. S'investiga la contribució del comerç de serveis a la variació de la generació d'ingressos globals durant el període 2000-2014, aplicant una anàlisi de descomposició estructural en un marc input-output global multiregional. Els resultats empírics indiquen que, en general, el comerç intermedi de serveis va contribuir amb un 5.38% a la generació d'ingressos globals, mentre que el comerç final de serveis hi va contribuir amb un 4.56% durant els 15 anys analitzats. Aquesta contribució significativa sembla explicar-se principalment per l'increment de la demanda de serveis, tot i que l'efecte negatiu de l'estructura del comerç suggereix que, per unitat de serveis comercials, el valor afegit generat va disminuir durant aquest període. A nivell sectorial, el comerç a l'engròs, el sector financer, els serveis administratius i de suport, els serveis jurídics i comptables, juntament amb el transport terrestre, semblen ser els principals contribuents dels serveis a través del comerç. Encara que els països del nord d'Europa, els BRIIC i els d'Amèrica del Nord són els més rellevants en termes de comerç de serveis, quan es considera la proporció del comerç de serveis dins de la seva pròpia contribució total, els països d'Europa de l'Est ocupen el primer lloc. El tercer capítol analitza tant els efectes econòmics com socials dels serveis, estudiant la distribució global dels ingressos generats entre el capital i el treball en els sectors de serveis per comprendre millor la disminució creixent de la proporció del treball en favor del capital, que augmenta la desigualtat d'ingressos. L'estudi mostra que, tot i que la compensació laboral en el sector serveis va registrar el major augment, la proporció del treball respecte al capital va disminuir en 2 punts percentuals, afavorint l'acumulació de capital; no obstant això, els serveis van mantenir la proporció laboral més alta en comparació amb altres sectors, fins i tot el 2014. L'anàlisi de descomposició estructural revela que, tot i l'increment salarial per una producció més gran, els guanys de productivitat—que permeten produir més amb menys treballadors—han reduït significativament els costos laborals, especialment en la indústria i els serveis, impulsats pels avenços tecnològics i la globalització. El darrer capítol abans de la conclusió se centra en les conseqüències socials de la globalització i els serveis, estudiant l'efecte dels components del creixement econòmic sobre la bretxa salarial de gènere (GPG), considerant diferents característiques socioeconòmiques, com l'edat i l'educació, per a 13 economies principals de la UE entre 1995 i 2018, amb un enfocament específic en els sectors de serveis. Els resultats mostren una reducció del 35% de la bretxa salarial de gènere a la UE durant aquest període, impulsada principalment per canvis estructurals i variacions en la distribució salarial entre sectors, amb les indústries públiques com la salut i els serveis socials aconseguint les majors reduccions. En conjunt, aquesta tesi subratlla el paper clau dels serveis en l'economia globalitzada, impulsant el desenvolupament econòmic mitjançant la creixent demanda i el comerç internacional, tot i que la globalització i els avenços tecnològics han reduït els costos laborals i la compensació dels treballadors, especialment en les economies avançades i els sectors públics.

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Services’ Economic and Social Effects in a Globalized World