This paper expands on this literature by combining data on several cross sections of global input-output (IO) tables, social accounting matrices and exports to construct the labor content of exports, and employment data to construct the jobs content of exports. The first three types of data come from the Global Trade Analysis Project (GTAP), which covers a wide range of countries, including many developing countries. The employment data come from the International Labor Office (ILO) statistics. The combination of these data allows for a wider coverage of developing countries and sectors than previous studies. The labor content of exports data for 2011 cover 57 sectors and 120 countries, 74 of which are developing and comprise over 90% of all developing countries’ population (see Appendix 1 for the sector coverage and Appendix 2 for the country coverage). The sectoral and country coverage is more limited for the jobs content of exports due to the restrictions imposed by employment data availability. The data in this case comprise 73 countries in 2001 but only 66 in 2011 and are available for 11 sectors. The resulting database splits the labor content into skilled and unskilled, as well as into the wages paid and jobs used directly for the production of exports or indirectly via the production of inputs for export production. We also use gross output in place of exports to construct the labor and jobs content of domestic production. (See Appendix 3 for the steps needed to reconstruct the LACEX database from GTAP and Appendix 4 for the list of variables in the LACEX database.<sup>4</sup> ) The resulting LACEX database is a valuable tool to describe the extent to which exports support jobs and wages in an economy, in specific sectors and over time. On the other hand such data are not meant to be used for policy analysis, for example to assess the possible labor market effects of a policy promoting specific sectors’ exports. The data are a representation of equilibrium outcomes, where firms have made input choices, given technology, output prices, labor market institutions as well as other relevant policies, and input prices. Because of that, the data are ill suited to predict the effect of a policy that changed this equilibrium in one way or another.

The analysis using the new LACEX data sets documents a number of new findings. First, the global share of labor value added embodied in gross exports (LVAX share or the labor intensity of exports) has been declining since 1995, when the total value of wages was $46 for each $100 of gross exports while in 2011 the value was $40. This decline is driven by a drop in high income countries as the LVAX share has remained flat in middle income countries, and has increased in low income countries. Overall the number of jobs supported by gross exports (JobX) has declined more rapidly than the labor value added in exports, a result consistent with labor saving technological changes across countries. It has also declined more rapidly in middle income than in high income countries. This decline notwithstanding, our data suggest that exports supported over 20% of total employment for the sample of 66 countries with data available in 2011.

Second, the labor value added directly contained in exports has declined over the past two decades. This result is not a reflection of changes in the share of labor value added in output (LVAD), which in fact has remained stable over the period. This difference between the direct LVAX share and direct LVAD share is thus mainly due to the different changes in the composition of exports versus output. The direct LVAX share has declined in high income and to some extent in middle income countries and has been flat in low income countries. On the other hand the indirect LVAX share has remained flat through the period, slightly declining in high income and increasing in developing countries. This is consistent with two opposite trends over the past two decades: first, countries have overall become more integrated in GVCs, where an increasing share of foreign value added (including labor) is embodied within countries’ exports via imported inputs, which would reduce the indirect labor value added in exports; second, coordinating these inputs requires more intensive use of (mainly domestic) services, which would increase the indirect content of domestic labor. We find a decline in the total value added share in exports, while the total labor share in exported value added increased. In contrast, we find declines in both the direct labor share in exported

> 4 The LACEX data sets can be accessed at: <u>http://data.worldbank.org/data-catalog/lacex.</u>

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