The Impact of Female Education and Employment on Service Sector Value Added Growth: Evidence From Panel Data

The world economy has experienced a considerable shift in structure from the late 1980s, with the service sector contributing approximately 62 percent to the overall economic output and 50 percent of the total employment share from 1991 to 2010. Given the importance of the service sector, we study the inter-relationship between female education attainment, female employment in the service sector, and the per capita value-added growth of the service sector. Our analysis uses data from 146 countries from 1991 – 2015. Using fixed effects panel estimations, we conclude that globally, an increase in female education significantly primary education attainment increases the growth of the service sector. In contrast, an increase in female employment in the service industry relative to male employment leads to decreased service sector growth. We suggest that the negative effects of female employment on growth are based primarily on discriminatory factors women face in the workplace. Our results are robust across all specifications and hold after correcting for possible endogeneity.