The job premium of Global Value Chains’ reorganization in European regions

The 2008 economic crisis triggered a reorganization of Global Value Chains (GVCs), but there is limited understanding of both the intensity of these reorganization processes and their impact on employment. This issue is especially relevant in advanced economies, where concerns over stagnant productivity and employment are increasingly troubling policymakers, struggling to decide whether to reconsider neoliberal trade policies in favour of more interventionist actions. This paper aims to examine the relationship between GVC reorganization and employment dynamics, arguing that a thorough interpretation requires identifying different models of GVC reorganization. Our empirical analysis suggests that job creation depends on the capability of an economic system of increasing its terms of trade, that is, the domestic value added and traded within the chain, per unit of value imported. The findings show that European regions which strengthened their terms of trade within GVCs during the crisis period (2007–2010) experienced a job premium in the post-recession period (2012–2016).