Global value chains and employment growth in asia

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Abstract

This paper considers the sources of employment demand in Asian economies. Using data from the World–Input Output Database, I examine the relative importance of domestic and foreign demand in generating employment. Despite some degree of heterogeneity across the sample, domestic demand is found to be the major driver of employment in all cases. Further, the relative importance of final and intermediate exports in generating employment varies by economy, with some economies relying on intermediate exports to generate employment to a greater extent than others, reflecting their importance as suppliers of intermediate inputs in global value chains, while others rely to a greater extent on final exports, reflecting their role as assemblers within global value chains. Considering developments over time, I find that employment is driven by two offsetting factors: (i) final demand (either domestic or foreign) and (ii) labor productivity, with changes in inter-industry structure also being important in the case of intermediate exports.
Original languageEnglish
Pages (from-to)100-130
Number of pages31
JournalAsian Development Review
Volume36
Issue number2
DOIs
Publication statusPublished - 2019

JEL classifications

  • o00 - Economic Development, Technological Change, and Growth
  • j24 - "Human Capital; Skills; Occupational Choice; Labor Productivity"

Keywords

  • Crisis
  • Decomposition
  • Employment
  • Global value chains
  • crisis management
  • decomposition analysis
  • demand analysis
  • developing world
  • economic development
  • employment generation
  • export
  • labor productivity
  • Asia

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