Global value chains and labor markets

Haruka Yane ()
Additional contact information
Haruka Yane: Osaka School of International Public Policy, Osaka University

Asia-Pacific Journal of Regional Science, 2019, vol. 3, issue 1, No 8, 177-200

Abstract: Abstract This study empirically investigates how backward linkages impact the skill structure of domestic labor demand by estimating a system of factor equations and measuring elasticities of factor demand. This was made possible by constructing a dataset using data on labor compensation from the Socio-Economic Accounts (SEA) along with industry-level international trade data for the period 1995–2009, covering 40 countries from the World Input–Output Database (WIOD). Based on an input–output model, an indicator that measures the pervasiveness of global value chains (GVCs), “foreign value-added in exports (FVAiX)”, is calculated. Including this index in a translog cost function, this study estimates a system of variable factor demand equations, using the iterative seemingly unrelated regressions (ISUR) method. Results reveal that participating in GVCs has both positive and negative effects on demand for different skill types of labor. On one hand, there is a positive trend for high-skilled workers, regardless of the region or GDP per capita of the country. On the other hand, results indicate a widening gap between high- and low-skilled labor, suggesting an increase in inequality, especially in low-income countries.

Keywords: Global value chains; Skill structure of labor demand; International trade; Input–output model; Foreign value-added in exports; Labor market (search for similar items in EconPapers)
JEL-codes: F14 F15 F16 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s41685-018-0091-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:apjors:v:3:y:2019:i:1:d:10.1007_s41685-018-0091-3

Ordering information: This journal article can be ordered from
https://www.springer ... cience/journal/41685

DOI: 10.1007/s41685-018-0091-3

Access Statistics for this article

Asia-Pacific Journal of Regional Science is currently edited by Yoshiro Higano

More articles in Asia-Pacific Journal of Regional Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().