, Volume 8, Issue 3-4, pp 181-197

Trade in High-Tech Services

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This paper examines the size, scope, and potential implications of trade in high-tech services in the U.S. The results suggest that many service activities are tradable, tradable service activities tend to employ more educated workers and pay higher wages, and high-tech services account for a large share of service activities that are tradable. Service exporters are more prevalent in high-tech industries with larger establishments and higher wages. Within industries, service exporters tend to be larger, pay higher wages, and are more productive. Tradable service activities seem consistent with U.S. comparative advantage and, as a result, less likely to be vulnerable to offshoring. Consistent with this, recent employment growth in tradable service industries is not significantly different than employment growth in non-tradable service industries.

The author wishes to thank the Sloan Foundation, the MacArthur Foundation, and the National Science Foundation (SES-0552029) for research support and Evan Gill for research assistance. Some of the research in this paper was conducted while the author was a Special Sworn Status researcher of the U.S. Census Bureau at the Center for Economic Studies. Research results and conclusions expressed are those of the author and do not necessarily indicate concurrence by the Bureau of the Census or the NBER. The paper has not undergone the review the Census Bureau gives its official publications. It has been screened to insure that no confidential data are revealed.