# **3. Data from the World Input-Output Database**

To measure GVC incomes a in equation (3), we need to track for each country gross output and value added by industry, the global input-output matrix and final goods shipments over time. This type of data is available from the recently released World Input-Output Database, available at <u>www.wiod.org</u> and described in Timmer (ed., 2012). The WIOD contains time-series of global input-output tables and supplementary labor accounts. It has been specifically designed and constructed for this type of analyses. The published database contains data up to 2009. For the purpose of this paper, we have revised the data for 2008 and 2009 based on the latest releases of the National Accounts. We also made preliminary estimates for 2010 and 2011 using the same construction methodology, but the quality is somewhat lower as less source material could be used due to limited availability of input-output tables for recent years.

In order to interpret and assess the empirical results, it is important to briefly discuss how the WIOD has dealt with two major challenges in data construction. First, the integration of time series of output and value added from national accounts statistics with benchmark input-output tables to derive time-series of input-output tables. Second, disaggregation of imports by country of origin and use category based on international trade statistics. This is discussed in section 3.1. In addition to measure GVC jobs we also need data on workers by skill type and industry. This is covered in section 3.2. Additional details regarding data construction and basic data sources can be found in Timmer (ed., 2012).

# **3.1 World input-output tables**

The WIOD provides a time-series of world input-output tables (WIOTs) from 1995 onwards. It covers 40 countries, including all EU 27 countries and 13 other major advanced and emerging economies namely Australia; Brazil; Canada; China; India; Indonesia; Japan; Mexico; Russia; the Republic of Korea; Taiwan, China; Turkey; and the United States. In total it covers more than 85 percent of world GDP in 2008. In addition a model for the remaining non-covered part of the world economy is made such that the decomposition of final output as given in equation (3) is complete.

The WIOTs have been constructed on the basis of national Supply and Use Tables (SUTs) which provide information on the intra-industry flows within a country. A Supply table indicates for each product its source (domestic industries and imports), while the Use table indicates for each product its destination (intermediate use by domestic industries, domestic final demand or exports). National SUTs have dimensions of 35 industries and 59 product groups. The 35 industries cover the overall economy and are mostly at the 2-digit NACE rev. 1 level or groups there from. They include agriculture, mining, construction, utilities, fourteen manufacturing industries, eight trade and transport services, telecom, finance, business services, personal services, and three public services. The product groups are more finely defined and are all two-digits in the 2002 Classification of Products by Activity (CPA), including twenty-three manufacturing products. SUTs provide a more natural starting point than input-output 14