The Political Economy of the Service Transition

Over the past four decades the wealthiest OECD economies-in Europe, North America, and Australasia- have faced massive structural change. Industrial sectors, which were once considered the economic backbone of these societies, have shrunk inexorably in terms of size and economic significance, while service sectors have taken over as the primary engines of output and employment expansion. The impact on labor markets has been profound: in many OECD countries more than three-quarters of employment is now in services, while industrial sectors, on average, account for less than one-fifth.

This sectoral shift in the locus of economic activity has potentially radical implications for politics and society. However, these implications are only beginning to be understood. This path-breaking book is a systematic attempt to understand the distinct political economy of service societies. It examines how different types of socio-economic regimes manage the service transition, with a central focus on job creation and destruction and the changing characteristics of labor markets, and shows that the economic, distributional, and political outcomes with which it is associated vary across countries depending on their political-institutional structures.