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

40 Pages Posted: 12 Oct 2023

See all articles by Piotr Lewandowski

Piotr Lewandowski

Institute for Structural Research (IBS)

Karol Madoń

Institute for Structural Research (IBS)

Deborah E. Winkler

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.

Keywords: routine task intensity, global value chains, globalisation, cross-country division of work, wage inequality

JEL Classification: J21, J24, J31, F66

Suggested Citation

Lewandowski, Piotr and Madoń, Karol and Winkler, Deborah E., The Role of Global Value Chains for Worker Tasks and Wage Inequality. IZA Discussion Paper No. 16510, Available at SSRN: https://ssrn.com/abstract=4599642 or http://dx.doi.org/10.2139/ssrn.4599642

Piotr Lewandowski (Contact Author)

Institute for Structural Research (IBS) ( email )

Wiśniowa 40B/8, 02-520
Warsaw
Poland

Karol Madoń

Institute for Structural Research (IBS) ( email )

Wiśniowa 40B/8, 02-520
Warsaw
Poland

Deborah E. Winkler

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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