IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/10433.html
   My bibliography  Save this paper

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

Author

Listed:
  • Lewandowski,Piotr
  • Madoń,Karol
  • Winkler,Deborah Elisabeth

Abstract

This paper studies the relationship between participation in global value chains, worker routinetask intensity, and within-country wage inequality. It uses unique survey data from 47 countries across the developmentspectrum to calculate worker-level, country-specific routine task intensity and combines them with sectoral measures ofbackward and forward global value chains participation. Higher global value chains participation is associated withmore routine-intensive work, specifically among offshorable occupations, especially in countries at lower developmentlevels. The results by broad sectors contrast sharply: higher global value chains participation is linked to ahigher routine task intensity in offshorable occupations in the industry but a lower routine task intensity innon-offshorable occupations in business services. Higher worker-level routine task intensity is strongly associatedwith lower wages, so global value chains participation indirectly widens the within-country wage inequality throughthis routine task intensity channel. At the same time, global value chains participation directly contributes toreduced wage inequality, except for the richest countries. Overall, this analysis finds that global value chainsparticipation reduces wage inequality in most low- and middle-income countries that receive offshored jobs butwidens wage inequality in high-income countries that offshore jobs.

Suggested Citation

  • Lewandowski,Piotr & Madoń,Karol & Winkler,Deborah Elisabeth, 2023. "The Role of Global Value Chains for Worker Tasks and Wage Inequality," Policy Research Working Paper Series 10433, The World Bank.
    • Handle: RePEc:wbk:wbrwps:10433
    as

    Download full text from publisher

    File URL: http://documents.worldbank.org/curated/en/099706205022399067/pdf/IDU080e5b8dd009680418b0b9600529297fdee90.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Baumgarten, Daniel & Geishecker, Ingo & Görg, Holger, 2013. "Offshoring, tasks, and the skill-wage pattern," European Economic Review, Elsevier, vol. 61(C), pages 132-152.
    2. Robert C. Feenstra & Gordon H. Hanson, 1999. "The Impact of Outsourcing and High-Technology Capital on Wages: Estimates For the United States, 1979–1990," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 907-940.
    3. Julieta Caunedo & Elisa Keller & Yongseok Shin, 2023. "Technology and the Task Content of Jobs across the Development Spectrum," The World Bank Economic Review, World Bank, vol. 37(3), pages 479-493.
    4. David H. Autor & David Dorn & Gordon H. Hanson, 2015. "Untangling Trade and Technology: Evidence from Local Labour Markets," Economic Journal, Royal Economic Society, vol. 0(584), pages 621-646, May.
    5. Gene M. Grossman & Esteban Rossi-Hansberg, 2008. "Trading Tasks: A Simple Theory of Offshoring," American Economic Review, American Economic Association, vol. 98(5), pages 1978-1997, December.
    6. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The Geography of Trade and Technology Shocks in the United States," American Economic Review, American Economic Association, vol. 103(3), pages 220-225, May.
    7. Guy Michaels & Ashwini Natraj & John Van Reenen, 2010. "Has ICT Polarized Skill Demand? Evidence from Eleven Countries over 25 Years," CEP Discussion Papers dp0987, Centre for Economic Performance, LSE.
    8. Joanna Wolszczak-Derlacz & Aleksandra Parteka, 2018. "The effects of offshoring to low-wage countries on domestic wages: a worldwide industrial analysis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 45(1), pages 129-163, February.
    9. Alessandro Borin & Michele Mancini, 2019. "Measuring What Matters in Global Value Chains and Value-Added Trade," World Bank Publications - Reports 31533, The World Bank Group.
    10. Aleksandra Kordalska & Magdalena Olczyk, 2023. "Upgrading low value-added activities in global value chains: a functional specialisation approach," Economic Systems Research, Taylor & Francis Journals, vol. 35(2), pages 265-291, April.
    11. Guy Michaels & Ashwini Natraj & John Van Reenen, 2014. "Has ICT Polarized Skill Demand? Evidence from Eleven Countries over Twenty-Five Years," The Review of Economics and Statistics, MIT Press, vol. 96(1), pages 60-77, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Piotr Lewandowski & Karol Madoń & Deborah Winkler, 2023. "The role of Global Value Chains for worker tasks and wage inequality," IBS Working Papers 05/2023, Instytut Badan Strukturalnych.
    2. Aleksandra Parteka & Joanna Wolszczak-Derlacz, 2019. "Global Value Chains and Wages: Multi-Country Evidence from Linked Worker-Industry Data," Open Economies Review, Springer, vol. 30(3), pages 505-539, July.
    3. Joanna Wolszczak-Derlacz & Aleksandra Parteka, 2018. "The effects of offshoring to low-wage countries on domestic wages: a worldwide industrial analysis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 45(1), pages 129-163, February.
    4. Harrigan, James & Reshef, Ariell & Toubal, Farid, 2021. "The March of the Techies: Job Polarization Within and Between Firms," Research Policy, Elsevier, vol. 50(7).
    5. Vallizadeh E. & Muysken J. & Ziesemer T.H.W., 2015. "Offshoring of medium-skill jobs, polarization, and productivity effect: Implications for wages and low-skill unemployment," MERIT Working Papers 2015-004, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    6. Reijnders, Laurie S.M. & de Vries, Gaaitzen J., 2018. "Technology, offshoring and the rise of non-routine jobs," Journal of Development Economics, Elsevier, vol. 135(C), pages 412-432.
    7. Vallizadeh, Ehsan & Muysken, Joan & Ziesemer, Thomas, 2016. "Offshoring medium-skill tasks, low-skill unemployment and the skill-wage structure," MERIT Working Papers 2016-070, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. Akay, Alpaslan & Savsin, Selen, 2022. "Offshoring and well-being of workers," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 388-407.
    9. Katharina Längle, 2020. "Offshoring: What Consequences for Workers? Evidence from Global Value Chains," Documents de travail du Centre d'Economie de la Sorbonne 20005, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    10. Eric D Gould, 2019. "Explaining the Unexplained: Residual Wage Inequality, Manufacturing Decline and Low-skilled Immigration," The Economic Journal, Royal Economic Society, vol. 129(619), pages 1281-1326.
    11. Katharina Längle, 2020. "Offshoring: What Consequences for Workers? Evidence from Global Value Chains," Working Papers hal-02548691, HAL.
    12. Matilde Cardoso & Pedro Cunha Neves & Oscar Afonso & Elena Sochirca, 2021. "The effects of offshoring on wages: a meta-analysis," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 157(1), pages 149-179, February.
    13. Dirk Bursian & Arne J. Nagengast, 2020. "Offshoring And The Polarization Of The Demand For Capital," Economic Inquiry, Western Economic Association International, vol. 58(1), pages 260-282, January.
    14. Thewissen, Stefan & Rueda, David, 2016. "Automation and the Welfare State: Technological Change as a Determinant of Redistribution Preferences," INET Oxford Working Papers 2016-02, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    15. Gravina, Antonio Francesco & Foster-McGregor, Neil, 2020. "Automation, globalisation and relative wages: An empirical analysis of winners and losers," MERIT Working Papers 2020-040, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    16. Katharina Längle, 2020. "Offshoring: What Consequences for Workers? Evidence from Global Value Chains," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-02899944, HAL.
    17. Nilsson Hakkala, Katariina & Huttunen, Kristiina, 2016. "Worker-Level Consequences of Import Shocks," IZA Discussion Papers 10033, Institute of Labor Economics (IZA).
    18. Jocelyn Maillard, 2021. "Automation, Offshoring and Employment Distribution in Western Europe," Working Papers 2108, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    19. Aleksandra Parteka & Joanna Wolszczak-Derlacz, 2020. "Wage response to global production links: evidence for workers from 28 European countries (2005–2014)," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(4), pages 769-801, November.
    20. Maarten Goos & Alan Manning & Anna Salomons, 2014. "Explaining Job Polarization: Routine-Biased Technological Change and Offshoring," American Economic Review, American Economic Association, vol. 104(8), pages 2509-2526, August.

    More about this item

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:10433. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.