The Value of U.S. Service Employment in Manufacturing Sectors

Author(s)

Sarah Oliver

Using data on service occupations in U.S. manufacturing sectors in 2016, this paper seeks to highlight the value of in-house services in U.S. manufacturing output, by assessing the relationship between the share of services occupations in a particular sector (services occupation intensity) and typical education and compensation in service occupations. Overall, this paper finds a positive and significant relationship between services intensity and the typical education level of service workers within sectors, and a positive and significant relationship between service intensity and the average compensation of service occupations across sectors. For U.S. manufacturing sectors, these in-house services represented between $8.7 and $17.5 billion in additional services value added in 2016 compared to $56.8 billion for intermediate services inputs in the same year.