channels. The findings show that the employment effects vary strongly depending on the type of trade considered (exports, intermediate imports, final imports, GVC participation). Assessing the relationship for employment and labor value added separately, the analysis finds the income channel to be stronger than the employment channel. The trade-and-labor links also critically depend on the sector under study, with manufacturing sectors showing the highest job and income growth associated with expanding exports in a sector. Not surprisingly, the way in which countries engage in GVCs matters for the magnitude of export-employment elasticities. But a country’s sectoral specialization also matters for the indirect job creation potential in supplying sectors. Finally, this study sheds light on the types of job activities embodied in exports. From a GVC perspective, tracking job activities that countries specialize in for their export production over time allows to detect upgrading patterns and allows to study aspects of job quality.

This paper contributes to the literature in a number of ways. First, this study provides new descriptive analysis drawing on recent employment-in-exports data covering over 50 high- and middle-income countries (HMICs). A major strength of these employment estimates is that they account for indirect linkages of an export sector to domestic supplying sectors. Increases in exports can lead to domestic job creation not only within the export sector, but also in domestic supplying sectors, allowing for a more accurate representation of the trade and labor links. As our analysis shows, the indirect job creation from manufacturing exports is higher than the direct job creation in these sectors, while for business and especially other services exports the bulk of employment is created directly in these services sectors. Some studies have used direct measures of employment in exports or GVCs, but they focus on measurement aspects and do not cover more recent years (Calì et al. 2016, <mark>Horvát, Webb and Yamano 2020</mark> ) or a narrow set of countries (Timmer et al. 2014).

Second, while trade research focused on skills intensity, labor productivity or average wage rate to capture jobs quality, this paper introduces a novel characterization of job specializations in exports, namely of activities, ranging from managerial, to engineering, to production, to other services activities (Kruse, Timmer, de Vries, and Ye 2023). Such measures reflect the composition of activities in exports, and changes over time, across countries, income levels, sectors, occupations, and for specific countrysector combinations. In the context of GVCs, emphasizing activities that countries specialize in for their export production – rather than the goods and services they export – is meaningful from a measurement and conceptual perspective: (i) the latter could embody a large share of foreign value added from activities performed abroad, and (ii) the concept of a value chain involves a range of value-adding activities. It is also warranted from a development perspective. Case study evidence suggests that moving towards nonproduction activities offers scope for economic upgrading, both across and within sectors. Adding the occupational dimension to sectoral specialization patterns helps track development trajectories.

<mark>Third, conventional methods of assessing trade and labor links econometrically within sectors across countries remain valuable for at least four reasons. (1) First, direct employment in exports measures (e.g., from OECD) are not available for many developing countries, especially those at lower-income levels, while data coverage of trade and employment is better. (2) Second, direct measures focus on jobs embodied in exports only, while econometric analysis allows to link employment to other types of trade, including imports and GVC participation, for which correlates could vary. (3) Third, regression analysis also allows to estimate trade-income elasticities besides trade-employment elasticities to understand which of these two channels is stronger.</mark><sup>6</sup> <mark>If trade-income elasticities are larger than trade-employment elasticities, this implies that increases in trade benefit workers more strongly through higher average wage rates rather than through more employment.</mark><sup>7</sup> <mark>(4) Finally, comparing elasticities based on formal</mark>

> 6 This is because labor income or labor value added (LVA) is the product of employment L and the average wage rate w (LVA=L*w). 7 While the direct measures also allow to assess the income content of exports, a comparison with the employment content of exports is more difficult.

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