Globalisation and unemployment in the EU: new insights on the role of global value chains and workforce composition

Mariam Camarero, Antonia López-Villavicencio () and Cecilio Tamarit
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Antonia López-Villavicencio: EconomiX-CNRS and University Paris Nanterre

No WP2022/10, Single Market Economics Papers from Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (European Commission), Chief Economist Team

Abstract: The participation of the European Union in Global Value Chains (GVCs) is significantly higher compared to North America and Asia and it has steadily increased with the creation of the Single Market and the launching of the euro. We provide empirical evidence on the consequences of GVC participation on aggregate unemployment. Using data for EU countries and impulse response functions derived from local projections, we show that a higher participa- tion reduces the unemployment rate in less advanced EU economies while it increases it in core countries. Our results also show that unemployment is particularly sensitive to GVCs when the labour cost is low.

Keywords: Global Value Chains; EU; local projections; unemployment (search for similar items in EconPapers)
JEL-codes: C32 F14 F15 F62 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2022-12
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Persistent link: https://EconPapers.repec.org/RePEc:bda:wpsmep:wp2022/10

DOI: 10.2873/147718

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