Employment in services (% of total employment)
Definition: Employment is defined as persons of working age who were engaged in any activity to produce goods or provide services for pay or profit, whether at work during the reference period or not at work due to temporary absence from a job, or to working-time arrangement. The services sector consists of wholesale and retail trade and restaurants and hotels; transport, storage, and communications; financing, insurance, real estate, and business services; and community, social, and personal services, in accordance with divisions 6-9 (ISIC 2) or categories G-Q (ISIC 3) or categories G-U (ISIC 4).
Description: The map below shows how Employment in services (% of total employment) varies by country. The shade of the country corresponds to the magnitude of the indicator. The darker the shade, the higher the value. The country with the highest value in the world is Palau, with a value of 85.90. The country with the lowest value in the world is Burundi, with a value of 5.60.
Source: International Labour Organization, Key Indicators of the Labour Market database.
Development Relevance: Sectoral information is particularly useful in identifying broad shifts in employment and stages of development. In the textbook case of economic development, labour flows from agriculture and other labour-intensive primary activities to industry and finally to the services sector; in the process, workers migrate from rural to urban areas. The breakdown of the indicator by sex allows for analysis of gender segregation of employment by specific sector. Women may be drawn into lower-paying service activities that allow for more flexible work schedules thus making it easier to balance family responsibilities with work life. Segregation of women in certain sectors may also result from cultural attitudes that prevent them from entering industrial employment. Segregating one sex in a narrow range of occupations significantly reduces economic efficiency by reducing labor market flexibility and thus the economy's ability to adapt to change. This segregation is particularly harmful for women, who have a much narrower range of labor market choices and lower levels of pay than men. But it is also detrimental to men when job losses are concentrated in industries dominated by men and job growth is centered in service occupations, where women have better chances, as has been the recent experience in many countries.
Limitations and Exceptions: There are many differences in how countries define and measure employment status, particularly members of the armed forces, self-employed workers, and unpaid family workers. Where members of the armed forces are included, they are allocated to the service sector, causing that sector to be somewhat overstated relative to the service sector in economies where they are excluded. Where data are obtained from establishment surveys, data cover only employees; thus self-employed and unpaid family workers are excluded. In such cases the employment share of the agricultural sector is severely underreported. Caution should be also used where the data refer only to urban areas, which record little or no agricultural work. Moreover, the age group and area covered could differ by country or change over time within a country. For detailed information, consult the original source. Countries also take different approaches to the treatment of unemployed people. In most countries unemployed people with previous job experience are classified according to their last job. But in some countries the unemployed and people seeking their first job are not classifiable by economic activity. Because of these differences, the size and distribution of employment by economic activity may not be fully comparable across countries. The ILO reports data by major divisions of the ISIC revision 2, revision 3, or revision 4. Broad classification such as employment by agriculture, industry, and services may obscure fundamental shifts within countries' industrial patterns. A slight majority of countries report economic activity according to the ISIC revision 3 instead of revision 2 or revision 4. The use of one classification or the other should not have a significant impact on the information for the employment of three broad sectors data.
Statistical Concept and Methodology: The International Labour Organization (ILO) classifies economic activity using the International Standard Industrial Classification (ISIC) of All Economic Activities, revision 2 (1968), revision 3 (1990), and revision 4 (2008). Because this classification is based on where work is performed (industry) rather than type of work performed (occupation), all of an enterprise's employees are classified under the same industry, regardless of their trade or occupation. The categories should sum to 100 percent. Where they do not, the differences are due to workers who are not classified by economic activity. Data on employment are drawn from a variety of sources including labor force surveys, household surveys, official estimates, and censuses. In a very few cases and only where other types of sources are not available, information is derived from insurance records and establishment surveys Employment data include both full-time and part-time workers.
Aggregation method: Weighted average
General Comments: Relevance to gender indicator: Men still make up the majority of people employed in all three sectors, but the gender gap is biggest in industry. Employment in agriculture is also male-dominated, although not as much as industry. Segregating one sex in a narrow range of occupations significantly reduces economic efficiency by reducing labor market flexibility and thus the economy’s ability to adapt to change. This segregation is particularly harmful for women, who have a much narrower range of labor market choices and lower levels of pay than men. But it is also detrimental to men when job losses are concentrated in industries dominated by men and job growth is centered in service occupations, where women have better chances, as has been the recent experience in many countries. There are several explanations for the rising importance of service jobs for women. Many service jobs—such as nursing and social and clerical work—are considered “feminine” because of a perceived similarity to women’s traditional roles. Women often do not receive the training needed to take advantage of changing employment opportunities. And the greater availability of part-time work in service industries may lure more women, although it is unclear whether this is a cause or an effect.