(7.9% annually). Minerals exports, which propelled export growth as well as wage growth, are not job intensive and as a result supported far less job growth. Our data also show that exports in South Africa have become less labor intensive, where the quantity of jobs and the labor value added per unit of exports has diminished overall, and more capital intensive. The composition of exports also matters for the impact of trade on jobs and wages in South Africa. While minerals have increasingly become an enclave sector with few backward linkages to the domestic economy, the labor impact of manufacturing exports in South Africa is increasingly felt in input-providing sectors, particularly services sectors, which had distributional implications by skill. Studies that only consider the jobs and wages to directly produce exports will underestimate the impact of trade on labor.

Our analysis is enabled by a newly developed World Bank database—The Labor Content of Exports (LACEX) (Calì et al. 2016)—that measures the contribution of labor to a given country’s domestic production and exports, measured as employees’ compensation (wages) or the number of jobs. Using inputoutput tables, exports and production data from the Global Trade Analysis Project (GTAP) and employment data from the International Labour Organization (ILO), the LACEX database represents a methodological innovation for developing countries. We consider aggregate exports as well as sectoral exports for South Africa and compare them to other emerging and middle-income countries and the other BRIC (Brazil, the Russian Federation, India and China) in particular. We also consider how exports contribute to labor market outcomes separately through their direct and indirect linkages (including both forward and backward linkages), and distinguish between skilled and unskilled labor. By considering the fuller labor implications of exports for the economy, our data allow us to evaluate the extent to which traditional versus nontraditional exports indeed support incomes and jobs.

The paper has three key findings. First, the sectoral composition as well as the labor intensity of exports in South Africa provides a nuanced understanding of the observed export-led ‘jobless growth’. The LACEX data combined with South Africa’s Labor Force Survey data suggest that much of the labor content of exports is shaped by the minerals sector. Between 2001 and 2011, minerals exports grew 22.2% annually, wages supported by minerals exports grew 24.6% annually, but jobs supported by minerals exports grew by only 3.9% annually.<sup>3</sup> South Africa is one of the middle-income countries in the sample with the lowest number of jobs associated with exports, and the quantity of jobs and the labor value added per unit of exports has diminished overall. Decompositions show that the observed decline in the labor intensity of exports is driven by exports becoming less labor intensive (labor-intensity effect), only slightly amplified by South Africa shifting to less labor-intensive exports (composition effect). While this is generally consistent with unbundling of production globally, where exports contain more foreign inputs, the data also show that exports in South Africa are becoming more capital intensive and less labor intensive: a decline in the share of total labor value added in gross exports has been accompanied by an increase in the share of capital value added in gross exports.<sup>4</sup>

> 3 Direct wages supported by minerals exports grew 33.4% annually, but direct jobs supported by minerals exports contracted by 16.8% annually.

> 4 These findings are consistent with the labor-saving technology changing across countries (see, for example, Kumar and Russell (2002) and Berman (2000)). Behar (2010a) shows that the elasticity of substitution between capital and labor has been negative in South Africa, also supporting our finding of a substitution away from labor toward capital for production.

3