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The Role of Global Value Chains for Worker Tasks and Wage Inequality

Author

Listed:
  • Lewandowski, Piotr

    (Institute for Structural Research (IBS))

  • Madoń, Karol

    (Institute for Structural Research (IBS))

  • Winkler, Deborah

    (World Bank)

Abstract

This paper studies the relationship between global value chain (GVC) participation, worker-level routine task intensity, and wage inequality within countries. Using unique survey data from 38 countries, we find that higher GVC participation is associated with more routine-intensive work, especially among workers in offshorable occupations. This relationship is particularly strong in industry and in countries at lower development levels. As higher routine task intensity links with to wages, this indirectly widens within-country wage inequality. However, GVC participation directly contributes to reduced wage inequality, except in the richest countries. Overall, GVC participation is negatively associated with wage inequality in most low- and middle-income countries that receive offshored jobs, and positively in high-income countries that offshore jobs.

Suggested Citation

  • Lewandowski, Piotr & Madoń, Karol & Winkler, Deborah, 2023. "The Role of Global Value Chains for Worker Tasks and Wage Inequality," IZA Discussion Papers 16510, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16510
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    References listed on IDEAS

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    More about this item

    Keywords

    routine task intensity; global value chains; globalisation; cross-country division of work; wage inequality;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor

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