Employment impacts of the US global value chain participation

Zuohong Pan

International Review of Applied Economics, 2020, vol. 34, issue 6, 699-720

Abstract: This study applies a new set of comprehensive GVC indices to measure the US GVC participation and examine its impact on US employment from both backward and forward GVC linkage perspectives. Based on data from the World Input-Output Database that covers 1995–2011 across all 35 industries in the US and their value-added trade with 40 other economies, and using Arellano and Bond’s GMM estimator for our dynamic panel data (DPD) model specifications, we find that GVC activities have significant positive impacts on the overall US employment. In our main model specification, each time the GVC participation increases by one point, the overall US employment increases by 0.60 percentage point; however, the benefits are only coming from the backward GVC linkages in their simple form and focused on the medium-skilled labor force. Finally, the general forward GVCs do have a minor significant negative impact on the low-skilled labor segment.

Date: 2020
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DOI: 10.1080/02692171.2020.1755238

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