The Economics of the Service Sector

A flourishing enterprise sector is continuously changing. While manufacturing firms are undergoing “servitization”, service companies go through “industrialization” by standardizing production processes in order to increase production volumes. 

IFN maintains a line of research on services with a strong public component. We study management and efficiency differences in service production, market models and forms of competition, and consequences of introducing welfare technology. In education, research topics include measures of school quality and the importance of national reforms. 

Minimum wages are particularly relevant in the service sector, where they are binding in several occupations. We study the levels and differentiation of minimum wages in Sweden and examine the effects of minimum wages on employment and other outcomes.

The effects of employment protection also differ considerably between industries. The service sector has been a stepping stone to the labor market for a lot of young people and immigrants. At the same time, rigid rules of employment protection have been demonstrated to weaken the labor market prospects of these groups. The program contains both reviews of research on the effects of employment protection and applied research on the laws governing employment protection in Sweden.

We also study market structure and productivity in retail and the importance of population density in service markets.

Finally, there is research on personal traits. The ability to cope with stress, self-discipline and social skills are all valuable characteristics in many service occupations.

The main financial contributors of the program are Almega and the Jan Wallander and Tom Hedelius Foundation.


Program Director: Henrik Jordahl


International cooperation

Visiting researchers

Collaborating with others is essential for IFN as a research institute. Our researchers co-author articles with colleagues from other institutes, and many also teach at various universities and colleges.

As part of our extensive program of guest researchers, leading international researchers visit the institute. The visitors present and pursue their research as well as interact and cooperate with researchers at IFN.

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Research Institute of Industrial Economics, Grevgatan 34 - 2 fl, Box 55665, SE-102 15 Stockholm, Sweden | Phone: +46-(0)8-665 45 00 |