inconsistency between mirror flows in bilateral trade data we inferred bilateral exports as mirror flows from the bilateral import statistics. In addition, data on bilateral trade in services has been collected, integrating various international data sources (including UN, OECD, Eurostat, IMF and WTO). This covers so-called Mode 1 (cross-border) services trade: services supplied from the territory of one country into the territory of another.<sup>6</sup> In total about 20 economic activities according to the Balance of Payments classification were distinguished which were mapped into the services industries. As is wellknown services trade data has not been collected with the same level of detail and accuracy as goods trade data and there is still much to be improved in particular in the coverage of intra-firm deliveries (Francois and Hoekman, 2010).

In the last stage, the national SUTs linked by bilateral trade data are stacked into a World SUT, which is used to construct a World input-output table that has a 35 industry-by-industry structure, assuming that the sales structure of a product is independent of the industry in which it is being produced (see Dietzenbacher et al. (2013) for technical details). The WIOTs used in this paper are expressed in basic prices, which means that the final demand value of manufacturing goods that is central in the analysis excludes net taxes and trade and transport margins. This fits our purpose to measure the distribution of value added in the production process of a good. Final demand for goods includes all goods that are consumed by household and government, or used for investment purposes. The tables are in current US$ using exchange rates for currency conversion. Exchange rate movements will have an impact on the measured level of GVC income over time, but not across countries at a particular point in time. Shares like these are base invariant. All WIOTs and underlying data sources are publicly available at www.wiod.org.

# **3.2 Employment by skill type**

One unique characteristic of the WIOD is the availability of employment and wage data that can be used in conjunction with the WIOTs. Skill levels of workers are proxied by their level of educational attainment. Data on the number of workers by educational attainment are available for a large set of countries, but WIOD provides an extension in two directions. First, it provides industry level data, which reflects the large heterogeneity in the skill levels used in various industries (compare e.g. agriculture and business services). Moreover, it provides relative wages by skill type that reflect the differences in remuneration of workers with different levels of education. For most advanced countries labor data is constructed by extending and updating the EU KLEMS database <u>(www.euklems.org) using the</u> methodologies, data sources and concepts described in O’Mahony and Timmer (2009). For other countries additional data has been collected according to the same principles, mainly from national labor force surveys, supplemented by household survey for relative wages in case needed. Care has been taken to arrive at series which are time consistent, as breaks in methodology or coverage frequently occur. Data has been collected for the number of workers involved, including self-employed and family

> 6 Mode 2 (consumption abroad) is also included in the WIOD, but not used in this analysis as the product composition of the expenditures is unknown.

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