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Effects of Upstream Positions in Global Value Chains on Skilled Labor Wage Share in Chile: Evidence from Plant-Level Panel Data

Author

Listed:
  • Yoshimichi Murakami

    (Research Institute for Economics and Business Administration, Kobe University, JAPAN)

Abstract

Although upstream positions in GVCs are expected to expand unskilled-intensive activities and reduce wage inequality in developing countries, empirical studies based on cross-country analysis have largely failed to provide evidence supporting the theoretical prediction. Employing exogenous industry-level variations and combining industry-level GVC indicators with plant-level detailed panel data, this study empirically analyzes whether upstream positions in GVCs are negatively associated with skilled labor wage share in Chile from 1995 to 2006. The results revealed that upstream positions in GVC were negatively associated with skilled labor wage share, indicating that upstream activities are related to unskilled- intensive tasks, as expected. Although the upstream positions were positively associated with skilled labor wage share in highly technological-intensive plants, the number of such plants was very limited. The findings were robust to the exclusion of affiliates with changing their industry affiliations and control for the persistent effect of the dependent variable and endogeneity of plant-level variables. Additionally, we found that the negative effects of the upstream positions in GVCs are primarily derived from plants operating in industries that were initially located in downstream position and shifted towards upstream position.

Suggested Citation

  • Yoshimichi Murakami, 2026. "Effects of Upstream Positions in Global Value Chains on Skilled Labor Wage Share in Chile: Evidence from Plant-Level Panel Data," Discussion Paper Series DP2026-04, Research Institute for Economics & Business Administration, Kobe University, revised Apr 2026.
    • Handle: RePEc:kob:dpaper:dp2026-04
    as

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    File URL: https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2026-04.pdf
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    References listed on IDEAS

    as
    1. Pavcnik, Nina, 2003. "What explains skill upgrading in less developed countries?," Journal of Development Economics, Elsevier, vol. 71(2), pages 311-328, August.
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    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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