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GVCs and Labor Market Outcomes:Evidence from MENA

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  • Yasmine Eissa

    (The American University in Cairo)

Abstract

This paper studies the role of global value chains (GVC) participation in fostering labor market outcomes in Egypt, Jordan, and Tunisia. While theory suggests an upward GVC effect on labor market conditions, we empirically investigate this assumption in Middle East and North Africa (MENA) countries endorsed with low GVC participation, weak labor markets, and high labor divides (skilled vs. unskilled and male vs. female). By merging World Bank Enterprise Surveys (WBES) and Integrated Labor Market Panel Surveys (ILMPs) data, we contribute to the literature as follows. First, we differentiate between GVC participation margins (extensive vs. intensive) and capture the effect of each on different labor market outcomes. Second, we explore the moderating role of job skill requirement in the GVCs and wages nexus. Third, we capture the GVC effect on skilled blue-collar and female employment and study the sectoral effect on the latter. Our results show a positive effect of GVCs on real wages, industry wage premium, skilled production workers, and female employment. In addition, the skill requirement strengthens the positive GVC effect on real wages. Results remain robust when we use alternative methodologies to control for endogeneity.political, and demographic factors to understand how they contribute to conflict.

Suggested Citation

  • Yasmine Eissa, 2024. "GVCs and Labor Market Outcomes:Evidence from MENA," Working Papers 1730, Economic Research Forum, revised 20 Sep 2024.
    • Handle: RePEc:erg:wpaper:1730
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