of exports, regardless of whether we use country and year fixed effects (columns 3 and 4) or not (columns 1 and 2). Developed countries on average have lower job intensity of exports – in line with comparative advantages and with a cursory look what **Error! Reference source not found.** Table 5 suggests. However, this between-country effect is smaller than the within-country effect, which is captured in columns (3) and (4). A 1% increase in a country’s GDP per capita is associated with an approximately 1.44% decrease in the direct number of jobs per $1 million of gross exports and 1.64% decrease in the total number of jobs per $1 million of gross exports. Thus, as countries develop, the job intensity of their exports declines, the opposite result to the LVAX share above.

**Table** **<u>5. Number of jobs in $1 million of gross exports (JobX share)</u>**

||(1)|(2)|(3)|(4)|
|---|---|---|---|---|
||ln(direct<br>JobX share)|ln(total<br>JobX share)|ln(direct<br>JobX share)|ln(total<br>JobX share)|
|ln(GDP per capita)|**-1.283*****|**-1.371*****|**-1.444*****|**-1.644*****|
||(0.058)|(0.062)|(0.235)|(0.189)|
|Constant|8.123|9.683|9.659|12.236|
||(0.576)|(0.614)|(1.985)|(1.548)|
|Year dummies|Yes|Yes|Yes|Yes|
|Country dummies|No|No|Yes|Yes|
|R<sup>2</sup>|0.861|0.884|0.975|0.982|
|n|281|281|281|281|

Note: * indicates significance at the 10% level; ** indicates significance at the 5% level; *** indicates significance at the 1% level. Robust standard errors in parentheses.

# **5. Conclusions**

Jobs and labor earnings can be a potential driver of poverty reduction and increased prosperity in developing countries. A channel through which exports can have an impact on poverty is by supporting jobs and increasing earnings for those employed.

In this paper we developed a methodology to measure wage content embodied in exports across countries and sectors. To create this database, we combined different releases of the GTAP database from 1995 to 2011. Although recent years have seen the emergence of different databases of global IO tables, we believe the GTAP data offer a balance between quality and country coverage, making it more suitable than other alternatives for our purposes. The resulting data set includes national IO linkages through trade for a maximum of 120 countries and 57 sectors in 2011. We also use data from the ILO to construct the jobs content of exports, resulting in 66 countries and 11 sectors in 2011. The data sets offer a unique opportunity to examine the value added linkages between different sectors for both skilled and unskilled labor and jobs. We analyze not only the direct contribution of labor to value added contained in a given county’s exports but also the indirect contribution of labor through exports via other sectors of the economy.

In this paper we discuss some global patterns of labor value added, followed by cross-country comparisons both for wages and jobs. We also examine the wage and labor content of exports both in terms of direct and indirect value added. We show that the share of labor costs in the total value of exports has been somewhat declining over time both for skilled and unskilled workers, with the share of total wages declining somewhat more for unskilled than for skilled workers. A similar trend can be observed when looking at only the direct value added of jobs, without taking into account the linkages between sectors in the economy. Moreover, we showed that countries with lower GDP per capita (and consequently lower wages) have more labor embodied in their exports. This is also supported by the results of a simple OLS regression showing the correlation between the level of development and jobs embodied in exports. The results indicate that a 1% increase in GDP per capita is associated with an approximately 1.3% decrease in the number of jobs as a share of exports. This finding is also in line with standard trade theory predicting 33