The aim of this paper is to examine how the service sectors contribute to labor productivity in the economy as a whole, as well as each of the sectors in particular, using the notion of vertically integrated sector developed by Pasinetti (1973). The studies focused on structural changes and economic growth in Brazil between 1990 and 2003. The results show that service sectors have lower productivity than other sectors, but the difference diminishes when considering total productivity instead of direct productivity. The main reason is the effect induced by increased productivity of other sectors on service sectors.
structural change; economic growth; vertically integrated sector
