Comparing labour market dynamics and service sector employment growth in Germany and the UK using household panel data

The project described in this paper set out to examine the development of service sector employment in Germany and the UK. Given the poor jobs record in Germany in recent years, much political interest has been shown in the potential for job creation in the service sector. However, service sector jobs raise a number of controversial issues in a country like Germany, associated with the encouragement of low-skill, low-wage employment and traditionally classified as having a high skill, high-wage equilibrium. The project was designed to compare the characteristics of service work, using data from the British Household Panel Survey and the German Socio-Economic Panel. The analysis covered the different patterns of growth in service occupations and industries in the two countries. A particular interest was in tracking the previous employment status of workers – from the traditional sector or non-employed – with a view to identifying who is most likely to take up service sector jobs. Transition patterns between occupations and employment and non-employment were also examined comparatively. In conclusion, the empirical analysis was set within national debates in economics, concerning the role of macro-economic policy impacts on the domestic demand for services. The findings were also located in relation to the sociological literature on self-serving households and the impact of strong male breadwinner households, which dampen demand for service jobs.