<mark>employment with those based on informal employment allows to tentatively assess the role of the informal labor market.</mark> Finally, this study contributes to the econometric literature on the labor market effects of GVC <mark>participation at the country-sector level. The majority of earlier sectoral studies focused on the effect of outsourcing, based on national input-output linkages, on the relative demand for workers or total labor demand in one specific country (see, e.g., the seminal study by Feenstra and Hanson 1996), whereas our analysis covers LMICs and also uses GVC measures based on international input-output linkages.</mark><sup>8</sup> <mark>This study also relates to the literature on measuring social upgrading through GVC participation, especially with regards to job creation. More research has been dedicated to studying the economic rather than the social impacts of trade and GVC participation. Empirical evidence across and within countries confirms that GVC participation fosters productivity, value-added, and growth (Constantinescu, Mattoo, and Ruta 2019; World Bank 2019; Stolzenburg, Taglioni, and Winkler 2019; Pahl and Timmer 2020). Research suggests, however, that social upgrading does not necessarily follow economic upgrading (Milberg and Winkler 2013; Kruse 2023), for instance due to high labor market adjustment costs (Hollweg et al. 2014).</mark> In section 2, we apply econometric analysis to estimate trade-employment and trade-income elasticities within sectors across countries. Labor demand models can be derived from a variable unit cost function<sup>9</sup> and have been applied widely in the literature at the country-sector-year level (see Appendix 1). The analysis is based on two different data samples: a sample of 48 HMICs covering mainly formal employment and a sample of 37 LMICs capturing both formal and informal employment (for details, see Appendix 2). In addition, the dataset of HMICs enables us to estimate both trade-employment and tradeincome elasticities and therefore examine which of these channels is stronger.<sup>10</sup> We hypothesize that sectoral differences as well as countries’ type of engagements in trade and GVCs could explain differences in labor markets outcomes. For instance, recent work found the export-toemployment elasticities for business services to be larger than for manufacturing in a sample of 43 mostly high-income countries using the WIOD database (Goretti et al. 2019). We run the model by broad sector (agriculture, manufacturing, business services, other services) and also at the disaggregated industry level to identify possible differences across sectors. We also assess the role of a country’s type of GVC specialization and categorize countries into four basic GVC groups (World Bank 2020), differentiating between countries specialized in (1) commodities, (2) limited manufacturing GVCs, (3) advanced manufacturing and services, and (4) innovative tasks (for details, see Appendix 3).

Sections 3 and 4 use direct measures of employment and job activities in exports. We rely on the OECD Trade in Employment database for estimates of employment in exports for 45 goods and services sectors (based on ISIC Rev. 4 sectors) for over 50 countries for the period 1995-2018. (Appendix 4 describes the underlying computations in more detail). The novel database Job Activities in Exports adds the dimension of occupations and is thus able to provide estimates of jobs in exports for sector-occupation combinations which define the so-called activities in exports (Appendix 5 describes the underlying computations for job activities in exports).

Our paper is structured as follows. Section 2 estimates correlations between various types of trade and employment or labor income within sectors. Section 3 studies the role of job creation in supplying sectors versus export sectors, while section 4 examines job activities in exports across and within sectors. Section 5 explores the role of policy in job creation from exports, while section 6 summarizes and concludes.

> 8 The research by Farole et al. (2018) studied the role of GVC participation for the labor value added, the labor share and the relative demand for skills in a cross-country-sector model for selected years between 2001 and 2014. Our proposed work differs with regards to the chosen models, methodologies, datasets and labor market outcomes.

> 9 See Brown and Christensen (1981) and an application in Feenstra and Hanson (1996), among many others.

> 10 The sample of LMICs only contains employment data and thus prevents us from performing a similar assessment.

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