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Wage differences according to workers' origin: The role of working more upstream in GVCs

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Article

Fays, Valentine ; Mahy, Benoît ; Rycx, François

Labour. Review of Labour Economics and Industrial Relations

2023

37

2

319-342

value chains ; globalization ; wages ; wage determination ; manufacturing industry ; wage differential

Belgium ; international

Wages and wage payment systems

https://doi.org/10.1111/labr.12244

English

Bibliogr.

"This article examines the impact of a firm's position in Global Value Chains (GVCs) on wages according to workers' origin. Based on a unique linked employer–employee dataset regarding the Belgian manufacturing industry covering the 2002–2010 timespan, our estimates show that firms that are more upstream in the value chain pay on average significantly higher wages. However, the wage premium associated with upstreamness is also found to be unequally shared among workers. Unconditional quantile regressions and decomposition methods suggest that high-wage workers born in developed countries benefit the most from being employed higher up the value chain, while workers born in developing countries appear to be unfairly rewarded."

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