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YFHSs are labour intensive services and therefore the share of personnel salary costs is high.
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Demand from older people for labour-intensive services will drive up the wages of the unskilled.
Growth has been capital-intensive, focusing on heavy industries such as steel rather than more labour-intensive services.
Mr Kuijs argues that this will require a shift in the composition of growth from capital-intensive manufacturing towards labour-intensive services.
But quite what level of GDP is needed to foster such job creation is uncertain, especially as labour-intensive services come to dominate the city's economy.
A poor country may have less money to spend on healthcare, but it also needs to spend less to provide the same labour-intensive services (far less than what a richer – and higher-wage – economy would have to pay).
The government has also promoted capital-intensive development by favouring manufacturing over the more labour-intensive services sector by holding down the prices of inputs such as land and energy.
Insee, a statistics body, says it cut output per head by 5% between 1999 and 2002.In labour-intensive services, the 35-hour week has brought mayhem as well as extra costs.
And across Asia, economies need to shift away from increasingly capital-intensive manufacturing towards labour-intensive services, so that a bigger share of national income goes to households.For Asian governments trying to fix their countries' problems, the temptation is to reach for familiar tools mercantilist currency policies to boost exports.
The most fundamental one remains the Baumol effect: labour-intensive services, such as nursing and teaching, have thus far proved as immune to productivity-enhancing technology as string quartets.Another cause for pessimism is that government does not respond to normal pressures.
The public services employ only a fifth of all workers but have been responsible for nearly half the increase in the total number employed in the past five years.The switch in resources from the private to the public sector was always likely to lower overall productivity growth since it is difficult to raise efficiency in labour-intensive services such as education.
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CEO of Professional Science Editing for Scientists @ prosciediting.com