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Global Value Chains And Labour Markets - Wages, Employment Or Both: Input-Output Approach

Author

Listed:
  • Sabina Szymczak

    (Gdansk University of Technology, Gdansk, Poland)

  • Joanna Wolszczak-Derlacz

    (Gdansk University of Technology, Gdansk, Poland)

Abstract

This article examines the overall effect of global value chains (GVCs) on labour market outcomes, namely wages and labour demand. The analysis exploits the World Input-Output Database (WIOD, 2016 release) covering 43 countries and 54 sectors from 2000 to 2014. GVC involvement is measured by the recently developed GVC participation indexes (based on both backward and forward linkages) and relative GVC position (Wang et al., 2017a, 2017b). The estimates employ the three-least-squares method. The results indicate that GVC position is negatively correlated both with wages and with employment, while the effect of GVC participation as such depends on whether backward or forward linkages are considered. We find some heterogeneity between countries (middle- versus high-income) and sectors (manufacturing versus services). Importantly, the labour market effect of involvement in GVCs is different from the channel of traditional trade in which the production process does not cross national borders. The R codes for calculation of input-output measures of GVC are provided.

Suggested Citation

  • Sabina Szymczak & Joanna Wolszczak-Derlacz, 2019. "Global Value Chains And Labour Markets - Wages, Employment Or Both: Input-Output Approach," GUT FME Working Paper Series A 59, Faculty of Management and Economics, Gdansk University of Technology.
    • Handle: RePEc:gdk:wpaper:59
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    File URL: https://cdn.files.pg.edu.pl/zie/Strona%20polska/Nauka/Publikacje/Working%20Papers/WP_GUTFME_A_59_Szymczak_Wolszczak-Derlacz.pdf
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    Cited by:

    1. Halit Yanikkaya & Abdullah Altun & Pınar Tat, 2022. "Does the Complexity of GVC Participation Matter for Productivity and Output Growth?," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(4), pages 2038-2068, August.

    More about this item

    Keywords

    global value chains; input-output; employment; wages;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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