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Monday, 9 March 2015

Baumol's cost disease is often used to describe consequences of the lack of growth in productivity in the quaternary sector of the economy and public services such as public hospitals and state colleges.

http://en.wikipedia.org/wiki/Baumol%27s_cost_disease

Since many public administration activities are heavily labor-intensive there is little growth in productivity over time because productivity gains come essentially from a better capital technology.

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