Conference Paper
Does Global Value Chain Participation Depress Labor Shares in Manufacturing?
No.
ERF32AC_141
Publisher
ERF
Date
May, 2026
Topic
F6. Economic Impacts of Globalization
F1. Trade
This paper examines the impact of global value chain (GVC) participation on labor shares across different skill levels within the manufacturing sector for 44 countries from 1995 to 2022. Using disaggregated labor share data and distinguishing GVCs into forward and backward modes, this paper reveals that backward GVC participation tends to depress the labor share of low and medium-skilled workers in both developed and developing countries. In contrast, forward GVC participation boosts labor shares across all skill levels in developing countries. Interestingly, higher backward participation in GVCs tends to raise high-skilled labor share in developed countries. These heterogeneous effects suggest that the direction of GVC participation, labor skill level as well as development stage shape the distributional outcomes for manufacturing employment.
Authors
Hüseyin Alperen Özer
Research Assistant, Department of Economics, Gebze Technical...
Authors
Halit Yanikkaya
Full Professor, Department of Economics, Gebze Technical...
Authors
Taner Turan
Professor, Economics, Gebze Technical University