Template-type: ReDIF-Paper 1.0
Author-Name: Ndubuisi, Gideon
Author-Email: ndubuisi@merit.unu.edu
Author-Workplace-Name: UNU-MERIT, Maastricht University, and German Development
	 Institute (DIE)
Author-Name: Owusu, Solomon
Author-Email: owusu@merit.unu.edu
Author-Workplace-Name: UNU-MERIT, Maastricht University, and German Development
	 Institute (DIE)
Title: Wage effects of global value chains participation and position: An 
	 industry-level analysis
Abstract: We examine how participation and positioning in global value chains
	 (GVC) affect wages. We also examine whether this relationship is
	 conditioned by a country's development level and labour market
	 regulation. The results show that participation and upstream
	 specialisation in GVCs are associated with higher wages but only in
	 developed countries. In developing countries, while GVC participation is
	 associated with higher wages, upstream specialisation exerts downward
	 pressure on wages. For analysis focusing on the role of labour market
	 regulation, we find that GVC participation only exerts a positive effect
	 on wages under stringent labour market regulation. Under flexible labour
	 market conditions, it exerts downward pressure on wages but allows for
	 the effective reallocation of GVC workers into knowledge-intensive and
	 high value added upstream activities in the value chain that are more
	 productive and wage rewarding. Additional analysis on the effects of
	 GVCs along the wage distribution show that participation and upstream
	 specialisation in GVCs are associated with higher wages across all wage
	 segments in the developed countries. In developing countries, GVC
	 participation only benefits higher wage earners and make low-wage
	 earners worse-off. Even when upstream specialisation is associated with
	 lower wages across all wage segments, low wage earners are
	 disproportionately affected.
Classification-JEL: F14, F16, J16, O14, O15, P51
Keywords: Wages, Global Value Chain, GVC Participation, Upstream Specialisation
Series: UNU-MERIT Working Papers
Creation-Date: 20211111
Number: 2021-042
File-URL: https://unu-merit.nl/publications/wppdf/2021/wp2021-042.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2021042