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Abstract
The role of services in regional development has been one of the core topics of research in industrial geography. The purpose of this paper is to examine the association between service employment and labor-market characteristics. The effect of localization economies on the distribution of service employment also is examined. The results show that the response of services to labor-market characteristics is relatively similar between large-and medium-sized metropolitan areas compared to large- and small-sized metropolitan areas. The significance of low-order white-collar and pink-collar work forces in attracting service employment at all levels of the metropolitan hierarchy implies that the impact on skills and earnings would be moderate. Manufacturing concentration, low labor quality, and a perception of higher wages are deterrents to growth in services, whereas localization economies and high-order labor are significant in determining certain types of service employment in metropolitan areas.