‘Baumol’s Disease’ Explains Flagging Productivity
This now-old economic idea should be on policymakers’ minds.
.. remained an aficionado of New York opera, and when in 1962 the Metropolitan Opera’s orchestra went on strike, Baumol sought an explanation for the Met’s regularly recurring labor troubles. He postulated “cost disease” afflicting labor-intensive service industries: Productivity will often increase not at all, or much slower, in some sectors
nursing, teaching, the performing arts
Moynihan’s corollary to Baumol’s theory: “Activities with Baumol’s disease migrate to the public sector.”