TRADE POLICY AND SUSTAINABLE DEVELOPMENT MEETING
Geneva, 6 -- 8 October 2015
TRADE, PRODUCTION PATTERNS AND JOBS
Session-5
M s . M a rva C O R L E Y -C O U L IB A L Y
Senior Economist
ILO Research Department
International Labour Organization
TRADE, PRODUCTION PATTERNS AND
JOBS
Marva Corley-Coulibaly, Senior Economist,
ILO Research Department
Structure
1.
Estimates and trends in jobs related to trade: GSC
participation
2.
Interaction between trade policies and sectoral
employment in GSCs
3.
GSC impact on firms and workers
4.
Policy challenges
Both trade in intermediate and final goods has been
growing fast…
1.95
290
1.90
270
250
1.85
230
1.80
210
1.75
190
1.70
170
1.65
150
1.60
130
110
1.55
90
1.50
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Intermediate-to-final-goods ratio
Trade in final goods
Trade in intermediate goods
Source: ILO Research Department calculation based on OECD STAN database.
Intermediate-to-final goods ratio
Trade in intermediate and final goods (Value,
Index: 2000 = 100)
Global trade value in intermediate and final goods (Index, 2000=100)
…with export growth and wage and salaried employment
growing hand-in-hand…
Wage and salaried employment (% total
emplyoment), average yearly
percentage point change, 2000-2013
Relationship between export and wage and salaried employment, 2000-2013, (% point change)
2
Cambodia
1.5
Viet Nam
Morocco
1
Rwanda
Uganda Zambia
0.5
Mauritania
Liberia Bolivia
Mozambique
Nicaragua Sierra Leone
Burkina Faso
0
Sri Lanka
-0.5
Zimbabwe
Ukraine
-1
-1.5
-1
-0.5
0
0.5
1
1.5
2
2.5
Export (% GDP), average yearly percentage point change, 2000-2013
Source: ILO, Trends Econometric Models, April, 2015 and World Bank, World Development indicators.
3
…and more and more workers in jobs linked to GSCs
600
Number and share of jobs linked with GSCs,
40 countries (66% of the global labour force), 1995-2013
25
Number of jobs (milions)
23
400
21
300
19
200
17
100
0
Share in total employment (percentages)
500
15
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Emerging economies: number of jobs (millions)
Advanced economies: number of jobs (millions)
Emerging economies: share in total employment (%)
Advanced economies: share in total employment (%)
Source: ILO Research Department estimates based on WIOD.
In most countries, the share of workers in jobs linked to GSCs
has increased in the past decade…
Share of jobs linked to GSCs in total employment (2000 and 2013)
60
50
40
Average share of all
sample countries
(2013)
30
20
10
0
2000
2013
Source: ILO Research Department estimates based on WIOD.
…particularly for women in emerging economies…
Share of females in GSCs-related and total employment 2013
46
44
42
40
38
36
34
32
Emerging economies
Advanced economies
GSC-related employment
All selected countries
Total employment
Source: ILO Research Department estimates based on WIOD and ILO, Trends Econometric Models, October 2014.
Many of the newly created jobs linked to GSCs are in the
service sector…
Change in number of GSC-related jobs by sector (millions), 2000-13
35
30
25
20
15
10
5
0
Agriculture
Industry: manufacturing
Emerging economies
Indusry: non-manufacturing
Services
Advanced economies
Source: ILO Research Department estimates based on WIOD and ILO, Trends Econometric Models, October 2014.
…and the share of GSC jobs in business services has increased
Annual change in the share of GSC jobs in total employment, 2000-11,
by services sector (percentage points)
0.8
0.6
0.4
0.2
0
-0.2
-0.4
Wholesale, retail
trade, incl motor
vehicles
Hotels and
Restaurants
Transportation
and
Communication
Financial
Business Services Education and
Intermediation
Health
Developed economies
Emerging economies
Other services
Women are not well-represented in some of the sectors that
are related to GSCs
Share of women in services employment, 2014 (%)
Developed economies
100%
80%
60%
40%
20%
0%
Education and
health
Hotels and
restaurants
Financial services
Other services
Wholesale and
retail trade
Business services
Transport and
communication
Hotels and
restaurants
Business services
Transport and
communication
Emerging economies
100%
80%
60%
40%
20%
0%
Education and
health
Financial services
Other services
Wholesale and
retail trade
Female
Source: ILO Trends Econometric Models, October 2014.
Male
2. Trade policies and GSC-related employment
Liberalization of goods trade creates a large number of GSC
jobs in services…
Estimated impact of a 1-pp-decrease in trading partner’s average applied
goods tariff on a country’s number of related GSC jobs, by sector (in %)
Developed economies
Emerging economies
5.00
5.00
4.50
4.50
4.00
4.00
3.50
3.50
3.00
3.00
2.50
2.50
2.00
2.00
1.50
1.50
1.00
1.00
0.50
0.50
0.00
0.00
Manufacturing
Services
Manufacturing
Services
Trade agreements also foster GSC-related job creation
Estimated impact of the presence of a trade agreement in force on a
country’s number of related GSC jobs, by sector (in %)
Developed economies
Emerging economies
40.00
40.00
35.00
35.00
30.00
30.00
25.00
25.00
20.00
20.00
15.00
15.00
10.00
10.00
5.00
5.00
0.00
Manufacturing
Services
0.00
Manufacturing
-5.00
-5.00
-10.00
-10.00
-15.00
-15.00
Services
3. GSC impact on firms and workers
… but the quality of employment and social upgrading require
additional effort.
Notes: For detailed notes, see Chapter 5 of World Employment and Social Outlook: The
Changing Nature of Jobs.
Source ILO Research Department estimates based on OECD Trade in Value-Added (TiVA)
database and WIOD.
Nearly all firm level evidence support positive productivity
impacts, but remains mixed on wages…
In supplier firms, GSC participation can improve productivity through:
• cause productivity gains through economies of scale
• create benefits from a diversified client base
• create knowledge and technology transfers: Brach and Kappel, 2009
In supplier firms, GSC participation may not impact wages because:
• there is self-selection, i.e. the entry into GSCs requires firms to be highly
productive and hence pay higher wages: Javorcik, 2014
• there is little evidence for positive wage premiums caused by GSC
participation.
Consequently, w e find the w age share declining in m ost sectors.
…there is declining wage share especially in countries with
large shares of GSC-related jobs.
Divergence of labour productivity and real labour compensation growths (Index: 1995 = 1)
United States
Poland
1.8
1.8
1.3
1.3
0.8
0.8
Real compensation
Labour productivity
Real compensation
Korea
Japan
1.8
1.8
1.3
1.3
0.8
0.8
Real compensation
Labour productivity
Labour productivity
Real compensation
Source: ILO Research Department based on OECD Productivity database and World Bank.
Labour productivity
4. Policy challenges
Achieving Decent Work in Global Supply Chains
Broad based policies to address wages gaps
• labour market regulations & institutions
• labour provisions in trade & investment agreements
Specific policies for countries, sectors, enterprises
and workers
• enhance technological capabilities, SMEs
• enhance protection of temporary, vulnerable workers
Achieving Decent Work in Global Supply Chains
Social dialogue to foster sustainable outcomes
• Codes of Conduct, CSR: voluntary basis
• IFAs: instruments negotiated with global trade unions
• The ILO Better Work Programme
• The Bangladesh Accord on Fire and Building Safety
ILO World Employment and Social Outlook:
www.ilo.org/research
Thank you!