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

Author

Listed:
  • Camarero, Mariam

    (University Jaume I and INTECO, Department of Economics,)

  • López-Villavicencio, Antonia

    (EconomiX-CNRS and University Paris Nanterre)

  • Tamarit, Cecilio

    (University of València and INTECO, Department of Applied Economics II)

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.

Suggested Citation

  • Camarero, Mariam & López-Villavicencio, Antonia & Tamarit, Cecilio, 2022. "Globalisation and unemployment in the EU: new insights on the role of global value chains and workforce composition," Single Market Economics Papers WP2022/10, Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (European Commission), Chief Economist Team.
    • Handle: RePEc:bda:wpsmep:wp2022/10
    DOI: 10.2873/147718
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    More about this item

    Keywords

    Global Value Chains; EU; local projections; unemployment;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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