The role of professional and business services in regional economies

The professional and business services (PBS) sector is an important and expanding portion of the US economy and an essential element of most large metropolitan area economies. This dissertation addresses the question of whether the expansion of professional and business services employment is positive for regional economies in the United States. This dissertation found that jobs in the professional and business services sector involve higher order occupations and require greater educational attainment than the average job, while paying salaries well above the national average. In terms of location patterns, PBS employment remains concentrated in large metropolitan areas, and the expected dispersal to mid-size metropolitan areas has not occurred. This analysis does not support the hypothesis that there is a relationship between the percentage of PBS employment at the state level and gross state product (GSP) growth. However, there appears to be a relationship between growth in PBS employment and GSP growth after 1997. PBS employment growth does appear to be positive for regional economies, but opportunities are not evenly spread and significant disparities exist between the professional services and business services components of the PBS sector.