driven by the period after the global financial crisis with over 26 million jobs lost between 2007 and 2018, of which 22.5 million can be attributed to China and 4 million to India, while some countries added jobs linked to apparel exports, most notably Indonesia, Türkiye, South Africa, and Mexico.

# 3.3 Are more jobs created in exporting or supplying sectors?

The sources of employment in exports can be further decomposed into the direct and indirect portions as well as domestic demand. The decomposition of employment in exports allows to identify jobs (1) directly in the exporting sector and (2) indirectly in sectors supplying to the export sector, while (3) the contribution of reimported inputs is negligible. The difference between a country’s total employment and employment in exports to a large extent reflects jobs created by domestic demand.<sup>18</sup> Figure 14 plots the full decomposition, ranked by the total employment share in exports. While the contribution of other sources of job creation varies across countries (yellow bar), the indirect contribution of supplying sectors on average tends to be smaller than the direct contribution across all countries, masking strong sectoral differences.

**Figure 14: Decomposition of employment in exports and domestic demand, 2018**

<!-- Start of picture text --> 100%<br>80%<br>60%<br>40%<br>20%<br>0%<br>direct exports indirect exports reimported exports other demand<br>LUX MLT IRL BGR SVN SVK CZE EST HUN NLD LTU LVA BEL POL HRV CHE AUT CYP ISL PRT CRI ROU DNK DEU SWE ESP GRC FIN ITA NZL KOR MEX ZAF FRA CAN GBR CHL ISR TUR RUS NOR IDN AUS CHN JPN BRA COL IND ARG SAU USA<br><!-- End of picture text --> Source: Own computations. Data: OECD TiE. The country sample covers 38 OECD countries plus 13 non-OECD countries. Note: Employment in exports can be decomposed into its (1) direct contribution in the exporting sector, (2) indirect contribution in sectors supplying to the export sector, and (3) contribution of reimported inputs.

Linkages to supplying sectors have been traditionally high for manufacturing exports, exceeding 62 percent of jobs in exports on average in 2018 (Figure 15). These can include agricultural inputs used in the food and beverages export sectors (such as fruits and vegetables), agricultural inputs used in apparel and shoe exports (such as cotton or hides and skins), but importantly also business services used in all of manufacturing exports (ranging from research and development, to design, to transport and logistics, to marketing services) – which all create jobs. In other words, the high export-employment elasticities found in manufacturing (section 2) underestimated their potential to create jobs in other sectors. Similarly, mining exports are known to create jobs in other sectors, in particular supporting services industries.<sup>19</sup> Interestingly, the share of indirect jobs linked to mining exports has expanded from 46 to 64 percent between 1995 and 2018, or that of direct jobs declined from 54 to 36 percent. This may be linked to

> 18 While the computation of jobs sustained by domestic demand would require international input-output data, this is a reasonable estimate.

> 19 Estimates of job multipliers in non-mining sectors for Sweden’s mining sector range from 0.2 to 0.5 percent, i.e., one mining job supports between 0.2 to 0.5 jobs in other sectors. It is highest in services including retail trade, transport, and hotels and restaurants (Moritz et al. 2017).

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