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The Employment Effects of Technology, Trade, and Consumption in Global Value Chains: Evidence for Developing Asia

Author

Listed:
  • DONALD JAY BERTULFO

    (Asian Development Bank, Metro Manila, Philippines2Delft University of Technology, Delft, The Netherlands)

  • ELISABETTA GENTILE

    (Asian Development Bank, Metro Manila, Philippines3Global Labor Organization, Essen, Germany)

  • GAAITZEN J. DE VRIES

    (Faculty of Economics and Business, University of Groningen, Groningen, The Netherlands)

Abstract

Global value chains (GVCs) have been a vehicle for job creation in developing Asia, but technology can also displace workers through automation or reshoring of production. We use an input–output approach to examine how employment responded to consumption, trade, and technological progress in 16 economies that accounted for about 95% of employment in developing Asia from 2008 to 2018. Structural decomposition analysis based on the Asian Development Bank’s Multiregional Input–Output database combined with harmonized cross-economy occupation by industry data indicates that, other things being equal, technological change within GVCs and task relocation relate to a decline of routine manual, relative to nonroutine cognitive, occupations in manufacturing. We find no evidence of major shifts in labor demand due to reshoring. Domestic consumption expenditure of goods and services is associated with an increase in labor demand that is large enough to offset efficiency changes in GVCs.

Suggested Citation

  • Donald Jay Bertulfo & Elisabetta Gentile & Gaaitzen J. De Vries, 2022. "The Employment Effects of Technology, Trade, and Consumption in Global Value Chains: Evidence for Developing Asia," Asian Development Review (ADR), World Scientific Publishing Co. Pte. Ltd., vol. 39(02), pages 1-44, September.
    • Handle: RePEc:wsi:adrxxx:v:39:y:2022:i:02:n:s011611052250010x
    DOI: 10.1142/S011611052250010X
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    Keywords

    developing Asia; employment; global value chains; task relocation; technology;
    All these keywords.

    JEL classification:

    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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