No CrossRef data available.
Published online by Cambridge University Press: 17 November 2022
An important literature emphasizes that finance grew rapidly after WWII relative to the full economy and the services sector, but these are poor benchmarks because they mask a broad structural shift from low- to high-skill services. We show that i) finance is among the most skill-intensive service industries, ii) the evolution of the finance income share closely tracks other high-skill service industries, and iii) finance grew much slower than the rest of high-skill services in the post-WWII period. The rise of modern finance is not as remarkable as prior research suggests, providing context for debates about the size of finance.
We thank an anonymous referee and Paul Malatesta (the editor) for extremely helpful feedback. We appreciate the feedback we received from seminar participants at the Swedish House of Finance, Stockholm University, KTH Royal Institute of Technology, and Iowa State University. We are particularly grateful to Arnie Cowan, Paul Koch, and Per Stromberg for detailed comments on early versions of the article. The Jan Wallander and Tom Hedelius Foundation and the Swedish House of Finance provided research support.