Global Value Chains and Trade in Value-Added: An Initial Assessment of the Impact on Jobs and Productivity

This paper contributes to a better understanding of the impact of global value chains (GVCs) on jobs and productivity by providing new evidence on employment embodied in value-added trade flows. Linking jobs data to the Trade in Value-Added (TiVA) indicators first highlights that a large share of employment in OECD and key partner countries relies on consumption taking place abroad and for most countries this share has increased between 1995 and 2011. There are differences across industries in the share of jobs embodied in exports but in all industries a majority of these jobs originates in the service sector. In almost all countries, the jobs embodied in exports are shifting towards high-skill and medium-skill occupations. Within GVCs, there is also a shift from employment in core manufacturing activities to employment in service support functions such as R&D, distribution, logistics, marketing, sales and customer services. The impact of GVCs on the number of people engaged in each industry is the combination of several factors but related to specialisation patterns and the evolution of productivity. In this assessment, it is important to look at the whole value chain and not to focus only on industries where GVCs are prevalent. Job creation in sectors less exposed to GVCs is the consequence of productivity gains in sectors the most integrated in GVCs.