ABSTRACT
The growth of service-sector employment and gross domestic product in industrial countries has been significant in the 20th century and has reached levels which have given rise to all kinds of theorizing and speculation about its causes and effects. This chapter reviews the existing body of knowledge relevant to an explanation of the causes and effects of this growth of the service sector. It presents taxonomy of service industries and a pioneering approach to the estimation of consumer, government and producer services. The chapter discusses the determinants and welfare effects of these services. In a large and growing literature, it analyses the causes and welfare effects of the historic growth in the service sector. The chapter provides a more definition of the analytical classes of consumer, government and producer service sectors and suggests estimates of the size of each for a number of countries.
