NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Tradability of Services: Geographic Concentration and Trade Costs

Antoine Gervais, J. Bradford Jensen

NBER Working Paper No. 19759
Issued in December 2013
NBER Program(s):   ITI

We develop a methodology for estimating the "tradability'' of goods and services using data on U.S. establishments. Our results show that the average service industry is less tradable than the average manufacturing industry. However, there is considerable within-sector variation in estimated tradability and many service industries are as tradable as manufacturing. Tradable service industries account for a significant share of economic activity and workers employed in those industries have relatively high average wages. Counterfactual analysis indicates that the potential welfare gains from policy liberalization in service trade are of the same order of magnitude as liberalization in the manufacturing sector.

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Document Object Identifier (DOI): 10.3386/w19759

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