Nikulin, D., Wolszczak-Derlacz, J., & Parteka, A. (2022). Working Conditions in Global Value Chains: Evidence for European Employees. Work, Employment and Society, Vol 36(4), 701-721

LINK Abstract: 

This article investigates a sample of almost nine million workers from 24 European countries in 2014 to conclude how involvement in global value chains (GVCs) affects working conditions. We use employer–employee data from the Structure of Earnings Survey merged with industry-level statistics on GVCs based on the World Input-Output Database. Given the multidimensional nature of the dependent variable, we compare estimates of the Mincerian wage model with zero-inflated beta regressions focused on other aspects of working conditions (overtime work and bonus payments). Wages prove to be negatively related to involvement in GVCs: workers in the more deeply involved sectors have lower and less stable earnings, implying worse working conditions. However, they are also less likely to have to work overtime. We prove that the analysis of social implications of increasing involvement of countries in global production must compare wage effects of GVCs with other aspects of complex changes in workers’ well-being.

Keywords

global value chains, social upgrading, wee-being of workers, working conditions

Szymczak, S., & Wolszczak-Derlacz, J. (2022). Global value chains and labour markets–simultaneous analysis of wages and employment. Economic Systems Research, 34(1), 69-96

LINK Abstract: 

This study examines the overall effect of global value chains (GVCs) on wages and labour demand. It exploits the World Input–Output Database to measure GVC involvement via recently developed participation indices (using both backward and forward linkages) and the relative GVC position using three-stage least squares regression. We find that the relative GVC position is negatively correlated with wages and employment and that the GVC participation effect depends on whether backward or forward linkages are considered. Moreover, we find heterogeneity across both countries (middle- vs high-income) and sectors (manufacturing versus services). Notably, the effect of GVC involvement on the labour market differs from that produced by traditional domestic trade.

Keywords: global value chains, input-output analysis, employment, wages

Wolszczak-Derlacz J., Nikulin D (2022) Within- and between-firm wage inequalities and trade integration in GVC. Journal of International Trade & Economic Development, 1-25

LINK Abstract: 

This paper examines between- (inter) and within- (intra) firm wage inequality using rich employer-employee data for 12 European countries. We confirm that much overall wage inequality is observed within sectors and within occupations. The share of the within- and between-firm components in overall wage inequality varies across countries. We estimate the link between involvement in global value chains (GVCs) and wages differentiating into the within- and between-firm components and test the hypothesis that there is a different effect of GVCs on wages depending on the position in a value chain (close to or far from the final demand). The results indicate that the between-firm wage component is the main channel through which involvement in global value chains is materialised. However, the exact sign of the relationship between GVC growth and wages (conditioned on upstreamness) is country-heterogeneous albeit its marginal economic significance.

Keywords: wages, GVC, upstreamness, inequalities

Szymczak, S., Parteka, A., & Wolszczak-Derlacz, J. (2022). Position in global value chains and wages in Central and Eastern European countries. European Journal of Industrial Relations, 28(2), 211-230

LINK Abstract: 

This paper examines the relationship between the relative position of industries in Global Value Chains (GVC) and wages in 10 Central and Eastern European countries. We combine GVC measures of global import intensity of production, upstreamness and the length of the value chain with micro-data on workers. We find that the wages of Central and Eastern European countries workers are higher when their industry is at the beginning of the chain or at the end than in the middle. Secondly, wage changes depend on the interplay between upstreamness and GVC intensity. In sectors close to final demand, greater production fragmentation is associated with lower wages.

Keywords: wages, global value chains, upstreamness, production fragmentation, Central and Eastern European countries

Nikulin D., Parteka A. Wolszczak-Derlacz J. (2022) Working condition in Europe The role of global value chains and advanced digital production-driven technological specialization, Working Paper 2022.12, European Trade Union Institute

LINK Abstract: 

This paper’s analysis of working conditions in Europe compares several aspects of job quality and wages, rather than relying on earnings as a sole indicator of workers’ well-being. We use a micro-level database of workers from 22 European countries to assess how global value chains (GVCs) and advanced digital production (ADP) technologies affect working conditions. We show that the estimated link between GVC involvement and working conditions is conditional on the technological content of the job: the two aspects should not be analysed separately. The exact effect varies across types of technological exposures and particular aspects of job quality. In occupations of high software and robot exposure, job quality tends to deteriorate as GVC involvement increases. This effect is largely negligible for monetary wages. However, we argue that wages for low software, robot and AI-exposed occupations decrease with GVC intensity.

Keywords: working conditions, global value chains (GVCs), advanced digital production (ADP) technological specialisation

Wolszczak-Derlacz, J., & Lu, Y. (2022) The role of the One-Belt One-Road initiative in China’s exports and global value chains. Equilibrium. Quarterly Journal of Economics and Economic Policy, 17(2), 317–341

LINK Abstract: Research background: China is regarded as the ?world factor? highly involved in international trade and plays an increasingly important role in the global value chains (GVC). Additionally, the One-Belt One-Road (OBOR) initiative was proposed by the Chinese government to further promote China in the international market. Purpose of the article: The article explores the role of the OBOR in China’s exports and global value chain.  It aims at: 1) verifying how OBOR impacts the volume of China's export and value-added export to its partners. 2) checking whether or not OBOR strengthens the industrial connection between China and its participants at the GVC level. 3) examining the different roles of corridors in China's exports and GVC. Methods: The empirical analysis is based on the augmented gravity model of international trade, which comprises China and its 197 partners in the period 2000-2018. The model is estimated for gross export as well GVC measured by domestic value added in export and the value contributed by a partner to China’s exports. Findings & value added: In general, there is a significant positive correlation between OBOR and the volumes of China’s export, domestic value-added trade and the value of partner’s contributed in China’s export. However, some of the results are blurred by OLS and FE methods. The author points out that FE-PPML estimation methods are more adequate. Among the six economic corridors, Bangladesh-China-India-Myanmar (BCIM), China-Pakistan (CP) and China Indochina Peninsula (CIP) were proven to play a prominent role in promoting China’s export, DVA and strengthening the links of global value chains. It is worth noting that the China-Mongolia-Russian Federation (CMRF) corridor harms China's export and DVA trade, and at the same time promotes countries in its region that benefit from trade with China

Nikulin, D., Wolszczak-Derlacz, J., & Parteka, A. (2021). GVC and wage dispersion. Firm-level evidence from employee-employer database. Equilibrium Quarterly Journal of Economics and Economic Policy, 16, 357-375

LINK Abstract: Research background: Wage inequalities are still part of an interesting policy-oriented research area. Given the developments in international trade models (heterogeneity of firms) and increasing availability of micro-level data, more and more attention is paid to wage differences observed within and be-tween firms. Purpose of the article: The aim of the paper is to address the research gap concerning limited cross-country evidence on a nexus of wage inequality–global value chains (GVCs), analysed from the perspective of wage inequality components within and between firms. Methods: This paper uses a large employee–employer database derived from the European Structure of Earnings Survey (SES), combined with sector-level indicators of GVC involvement based on the World Input-Output Database (WIOD). As a result, a rich database covering more than 7.5 million observations is created. The regression-based decomposition modelling technique developed by Fiorio and Jenkins (2010) is used to identify the contributions of different factors to wage inequalities, focusing on the components within and between firms. Findings & value added: The analysis presented in this paper aimed to show the contribution of GVC involvement, among various other factors, to the observed inequality of wages. Due to the use of a rich database that merges employer and employee data, the effects materialised with respect to different types of wages could be analysed separately, in particular components between and within firms. The general conclusion from the regression-based decomposition in log wages is that GVCs contribute marginally to the observed wage inequality in the European sample analysed in this paper. Some differences confronting the components within and between firms (the latter dominates) are observed; there is also certain intra sample heterogeneity in the estimated results (e.g. due to sector type or country group), but the general result is robust. 
 

Nikulin, D., Szymczak, S. (2020). Effect of the integration into Global Value Chains on the employment contract in Central and Eastern European countries. Equilibrium. Quarterly Journal of Economics and Economic Policy, 15(2), 275–294. doi: 10.24136/eq.2020.013 (indexed in Web of Science - Emerging Sources Citation Index)

LINK Abstract: Research background: In the era of globalization, there is a need to address decent work deficits in Global Value Chains (GVCs). The forms of working conditions reveal a broad dispersion of contents. The literature review exposes hardly any Europe-focused research assessing the socioeconomic impact of global production links and going beyond their pure economic effects assessed in terms of employment, productivity or wages.
Purpose of the article: This paper investigates how  involvement in GVCs affects labour standards. In particular, we assess how the integration into GVCs impacts the probability of having indefinite type of employment contract, which stands for one of the decent work indicator. Moreover, we draw individual and firm-level characteristics determining the type of employment contract.
Methods: We use linked employer-employee data from the Structure of Earnings Survey merged with industry-level statistics on GVCs based on World Input-Output Database — the sample is composed of over 5 million workers from 10 Central and Eastern European countries (CEEC) observed in 2014. The involvement into GVCs is measured using a novel approach based on the concepts of global import intensity (GII). We employ logistic regression with robust standard errors.
Findings & Value added: Controlling for individual and firm-level characteristics (sex, age, education level, length of service in enterprise, size of the enterprise) we find that greater integration into GVCs increases the probability of having temporary type of employment contract, mainly in tradable sectors. However, across CEE countries the relation between GVC and employment type is mixed. In this way we expand the existing literature by reporting the effects of GVCs on labour standards in CEEC.

Keywords: working conditions, global value chains, well-being of workers, employment contract

Parteka A., Wolszczak-Derlacz J. (2020). Wage Response To Global Production Links – Evidence For Workers From 28 European Countries (2005–2014). Review of World Economics. https://doi.org/10.1007/s10290-020-00380-4 (JCR IF=1.186)
LINK Abstract: Using rich individual-level data on workers from 28 European countries, this study provides the first so extensive cross-country assessment of wage response to global production links within GVC in the period 2005–2014. Unlike the other studies, the authors (i) address the importance of backward linkages in globally integrated production structures (capturing imports of goods and services needed in any stage of the production of the final product); (ii) measure occupational task profile of workers with country-specific indices of routinisation; (iii) compare the impact of global production links on wages between workers from Western, Central-Eastern and Southern Europe; employed in manufacturing and non-manufacturing sectors; (iv) account for direct and indirect dependence on GVC imports from developing and high-income countries. The study takes into account the potential endogeneity issues. The results suggest that global import intensity of production exhibits negative pressure on wages in Europe. This effect concerns mainly workers from Western Europe employed in manufacturing and is driven by production links with non-high income countries but our counterfactual estimates suggest that the effect is economically small.
Parteka A., Wolszczak-Derlacz J. (2018). Global Value Chains and wages: multi-country evidence from linked worker-industry data. Open  Economies Review . (IF=1.368).

LINK Abstract This paper uses a multi-country microeconomic setting to contribute to the literature on the nexus between production fragmentation and wages. Exploiting a rich dataset on over 110,000 workers from nine Eastern and Western European countries and the United States, we study the relationship between individual workers’ wages and industry ties into global value chains (GVCs). We find an inverse (but weak) relationship between the degree of industries’ involvement in GVCs and wages. Workers employed in routine occupations clearly earn less, but it is difficult to attribute it to the role played by the involvement of their countries and industries in global value chains.

Keywords Wage . Global value chains. Foreign value added

Parteka A. (2018) Import Intensity of Production, Tasks and Wages: Microlevel Evidence for Poland. Entrepreneurial Business and Economics Review. 6(2): 71-89 (listed in Web of Science - Emerging Sources Citation Index)

LINK Abstract: This article relates to recent literature on labour market consequences of production fragmentation within Global Value Chains, analysed in the presence of workers’ heterogeneity and differences in the task content of jobs. The main aim is to assess if there is a relationship between wages of Polish workers and the degree of Polish production dependence on imported inputs. Using microdata from EU-SILC on workers from Poland observed in 2008-2014, we estimate a Mincerian model, augmented by a measure of task content of occupations and the industry level index of the import intensity of production computed with input-output data and accounting for good’s production sequence). IV estimation is employed to account for potential endogeneity between the import intensity of production and wages. Regression results suggest that negative relationship between wages of Polish workers and the dependence of their sector of employment on foreign inputs is magnified by the routinization level of the occupation. Hence occupation-specific task requirements play a role. Implications & Recommendations: It implies that not all the Polish workers are affected in the same. The movements towards jobs with higher degree of non-routine content could protect against negative wage effects of fragmentation. The relationship between wages in Poland and the reliance on foreign inputs and GVCs links has not yet been studied from the micro-level task-based perspective. This article fills in this gap.

Keywords: import intensity of production; global value chains; production fragmentation; wages; tasks

Wolszczak-Derlacz J. (2018) The analysis of firms’ involvement in internationalisation and determinants of its intensity – an analysis for developing and post-transition economies, Economics and Business Review 4(1), 44-63 (listed in Web of Science - Emerging Sources Citation Index)

LINK Abstract: The study presents the empirical analysis of firms’ involvement in different forms of internationalisation: export, indirect export, import, indirect import and finally simultaneous exporting and importing. The analysis is based on firm-level data from the World Bank Enterprise Survey (March 2017 release). The empirical part is divided into two stages. Firstly account is taken of firms’ heterogeneity and then a Melitz type analysis of the firms’ likeliness of being involved in international activity is performed. Secondly the sample of firms is limited to only those involved in the internationalisation process and then a regression is carried out with the export/import intensity being the dependent variable. The results indicate that determinants of the foreign markets are different from those connected with trade intensity with the exception of the foreign ownership which is the only one associated in the same way with involvement in internationalisation and with its intensity.

Keywords: firm-level analysis, trade, internationalisation

Szymczak S. (2018). Production fragmentation and employment. Country-industry level analysis based on WIOD 2016. Roczniki Kolegium Analiz Ekonomicznych, 53 (2018), 131-146

LINK Abstract:  The aim of this research is to reanalyse the possible impact of production fragmentation on employment using the newest World Input-Output Database (WIOD) release (2016) and recently proposed by Timmer, Los, Stehrer and de Vries measure of production fragmentation which traces the imports needed in all stages of production. This study is provided on country-industry level for 56 industries and 41 countries for the years 2000-2014. The estimated model is based on augmented labour demand function. Our empirical results show that certain countries and sectors can in fact feel the negative impact of increasing production fragmentation on labour demand.

Keywords:  global value chains, production fragmentation, global import intensity, employment

Parteka, A., Wolszczak-Derlacz J. (2017) Workers, Firms and Task Heterogeneity in International Trade Analysis: An Example of Wage Effects of Trade Within GVC, Entrepreneurial Business and Economics Review, 5(2), 9-25, DOI: http://dx.doi.org/10.15678/EBER.2017.050201

LINK Abstract: The main aim of this article is to present how the heterogeneity of workers, firms, and tasks can be incorporated into empirical international trade analysis. In particular, we provide an empirical example in which we aim to quantify the reliance on foreign value added (FVA) within Global Value Chains (GVC) on wages.We estimate a Mincerian wage model augmented with a measure of foreign value added drawn from international input-output data. We employ econometric modeling with instrumental variable (addressing the endogeneity between trade and wages) and estimated through weighted regression with cluster-robust standard errors. Controlling for individual workers and job characteristics, we find the negative correlation between FVA and wages. The effect is conditional on the skill and task typology (affecting mostly workers performing routine tasks).

Keywords: wage, worker heterogeneity, international trade, foreign value added, tasks

Parteka A., Szymczak S., Wolszczak-Derlacz J. (2017) Gender wage gap convergence and skills heterogeneity in Poland (2005-2014) - quantile regression analysis based on microdata from EUSILC, Roczniki Kolegium Analiz Ekonomicznych Szkoły Głównej Handlowej w Warszawie, NR 4: 129-142

LINK Abstract: In this article we quantify the magnitude and evolution of gender wage differentials in Poland over the years 2005–2014 using microlevel data from EU-SILC database (Statistics on Income and Living Conditions). It the study gender wage gap is examined through quantile regression analysis. It is shown that the gender wage gap varies along the wage distribution with workers’ skills heterogeneity playing a role. Additionally, the decomposition technique reveals that the unexplained wage gap is highest for the top of the distribution. Finally, the results suggest a slow decrease in discriminatory component of the wage gap –only for the bottom of the wage distribution.

Keywords: gender wage gap, wage differentials, EU-SILC, skills heterogeneity, quantile regression

Parteka A., Wolszczak-Derlacz J. (2017). Trade in value added of countries involved in TTIP: EU-USA comparison. CesIfo Forum. 18(1): 14-16

LINK Abstract: The aim of this paper is to present key facts concerning trade in the value added of those countries participating in the Transatlantic Trade and Investment Partnership (TTIP). In particular, we describe how involvement in global production networks (GPN) varies across EU countries with respect to the United States. After describing the key concepts, we locate them within recent economic literature and present the results of an empirical exercise, comparing the domestic and foreign content of the analysed countries’ exports.

Keywords: TTIP, trade in value added

Kordalska, A., Parteka, A., Wolszczak-Derlacz, J.(2016) Global value chains and productivity gains: a cross-country analysis, Roczniki Kolegium Analiz Ekonomicznych Szkoły Głównej Handlowej w Warszawie, Nr 41: 11 - 28

 LINK Abstract: The main aim of this article is to assess the implications of involvement in global value chains (GVC) on sectoral productivity growth from the international perspective. Our panel data analysis covers 40 countries, 20 industries (13 manufacturing and 7 services sectors) in the period 1995–2011. Estimation results suggest that there is a positive link between TFP growth and the involvement of sectors in global value chains (measured as a share of foreign value added in exports). In particular, positive impact of foreign value added on TFP growth takes place mainly in manufacturing sectors. The results are robust to changes in productivity growth measurement.

Keywords: global value chains; foreign value added; productivity; panel data analysis

Book chapters

Wolszczak-Derlacz, J. (2021). ICT, financial markets and their impact on firms' performance and internationalisation. In The Digital Disruption of Financial Services (pp. 46-74). Routledge
LINK Abstract: In this study we examine emerging nexuses between information and communication technology (ICT), finance, and growth. It assess the association between ICT usage and finance constraints and firms' internationalisation decisions. The study is based on the cross-section of firm-level data from the World Bank Enterprise Survey (February 2021 update) covering 139 emerging economies over the period from 2006 to 2019. We find that firms' performance (labour productivity) is positively correlated to ICT usage and negatively to financial constraints. Some of the ICT proxies are conditioned on worker qualifications: firms with a higher share of non-production and skilled workers gain more from the ICT employed. Additionally, enterprises present in foreign markets are on average characterised by higher ICT usage. Some ambiguous results are found in this aspect as far as financial conditions and firms' internationalisation processes are considered. Finally, the firms' first adjustment to COVID-19 is reported.

Parteka , A. (2016) Zmiany w strukturze handlu międzynarodowego w kontekście globalnego podziału produkcji i handlu wartością dodaną [w:] Dominiak P., Lechman E., Olczyk M., Parteka A., Wolszczak-Derlacz J. (2016). Zmiany strukturalne w gospodarce światowej. Księgarnia Akademicka. Kraków.

Working papers

Szymczak S., Parteka A., Wolszczak-Derlacz J. (2019).   Position  in  global  value chains: the impact on wages in Central and Eastern European Countries. GUT FME Working Papers Series A, No 1/2019(53), Gdansk (Poland): Gdansk University of Technology, Faculty of Management and Economics.

 

 LINK Abstract:  This paper examines the relationship between the relative position of industries in Global Value Chains (GVCs) and wages in ten Central and Eastern European countries in the period 2005-2014. We combine GVC measures of global import intensity of production, upstreamness  (distance  from  final  use),  and  the  length  of  the  value  chain  (based  on WIOD) with micro-data on workers from EU-SILC. We find that the wages of CEEC workers are higher when their industry is at the beginning of the chain, far from final demand (high upstream) or at the end (low upstreamness – sectors close to final demand) than in the middle. Secondly, wage changes depend on the interplay between upstreamness and GVC intensity. In sectors close to final demand, greater production fragmentation, measured either by global import intensity or by vertical specialisation, is associated with lower wages. Higher upstream, this effect is not sustained. 

Keywords:  wage, GVC, upstreamness, production fragmentation, CEECs

Nikulin D., Wolszczak-Derlacz J., Parteka A., (2019). Working conditions in global value chains. Evidence for European employees. GUT FME Working Papers Series A, No 2/2019(54), Gdansk (Poland): Gdansk University of Technology, Faculty of Management and Economics.

 LINK  Abstract: This paper investigates how involvement in Global Value Chains (GVCs) affects working conditions. We use linked employer-employee data from the Structure of Earnings Survey merged with industry-level statistics on GVCs based on the World Input-Output Database. The sample consists of almost 9 million workers in 24 European countries in 2014. Given the multidimensional nature of the dependent variable, we compare the estimates resulting from a Mincerian wage model with zero-inflated negative binomial regressions that analyse other aspects of working conditions (overtime work and bonus payments). As to the impact of production fragmentation on social upgrading, wages prove to be negatively related to sectoral GVC involvement. Workers in sectors more deeply involved in GVCs have lower and less stable earnings, meaning worse working conditions; on the other hand, they are also less likely to have to work overtime, which one may see as a sign of better labour standards.  

Keywords:  working conditions, Global Value Chains, wellbeing of workers, social upgrading

Nikulin D., Wolszczak-Derlacz J. (2019). GVC involvement and the gender wage gap: micro - evidence on European countries. GUT FME Working Papers Series A, No 5/2019(57), Gdansk (Poland): Gdansk University of Technology, Faculty of Management and Economics.

 LINK Abstract:  In this paper we examine the linkages between involvement in global value chains (GVCs) and gender wage inequalities. We use merged data from the wide-ranging Structure of Earning (SES) database and the World Input Output Database (WIOD) for the years 2002, 2006, 2010 and 2014 covering manufacturing industries in 18 European countries. We employ a wealth of information on employees’ personal and company characteristics and a sectoral variable reflecting involvement in GVCs measured with foreign added value embodied in exports (FVA/Exp.) We augment the Mincerian regression with the GVC variable and report on gender wage discrimination among European employees. The results indicate that the wages of workers employed in sectors more involved in GVCs are lower. However, the relationship between GVC involvement and wages differs with respect to gender: women are more affected by the negative impact of greater trade involvement than men. There is some education/skill/occupation heterogeneity, with workers with a medium level of education and medium skills being most affected. Finally, our results show different patterns for concentrated and competitive industries: a greater female wage disparity due to GVC intensification is observed for the former. 

Keywords:  gender wage gap, gender inequalities, micro data, European countries

Szymczak S., Wolszczak-Derlacz J.(2019). Global value chains and labour markets –wages,  employment  or  both:  input-output  approach.GUT  FMEWorking  Papers  Series  A, No 7/2019(59), Gdansk   (Poland):   Gdansk   University   of   Technology, Faculty   of   Management   and Economics.

 LINK Abstract:  This  article  examines  the  overall  effect  of  global  value  chains  (GVCs)  on  labour  market outcomes,  namely  wages  and  labour  demand.  The  analysis  exploits  the  World  Input-Output Database (WIOD, 2016 release) covering 43 countries and 54 sectors from 2000 to 2014. GVC involvement is measured by the recently developed GVC participation indexes (based  on  both  backward  and  forward  linkages)  and  relative  GVC  position  (Wang  et  al., 2017a, 2017b).  The  estimates  employ  the  three-least-squares  method.  The  results  indicate that  GVC  position  is  negatively  correlated  both  with  wages  and  with  employment,  while the effect of GVC participation as such depends on whether backward or forward linkages are  considered.  We  find  some  heterogeneity  between  countries  (middle-versus  high-income) and sectors (manufacturing versus services). Importantly, the labour market effect of  involvement  in  GVCs  is  different  from  the  channel  of  traditional  trade  in  which  the production process does not cross national borders. The R codes for calculation of input-output measures of GVC are provided.

Keywords:  global value chains, input-output, employment, wages


Parteka A, Kordalska A. (2022). Artificial intelligence and productivity: global evidence from AI patent and bibliometric data (złożone, working paper )
Bazychowska Z., Parteka A. (2022) Productivity effects of natural resources’ trade – comparison to mechanisms of technological specialization (2022 – ‘work in progress’)